Significant evidence shows that nitrogen (N) supply may influence microbial community structure and, in some cases, the rate of primary productivity in fresh waters. To date, however, most focus has been on dissolved inorganic N (i.e., ammonia and nitrate), or dinitrogen gas. Far less is known about the effects of dissolved organic N such as urea on plankton activity, although this compound is both produced by in-lake processes and is a significant component of external loading. We evaluated the urea distribution and the activity of the major enzyme responsible for its assimilation (urease) in Lake Erie, which has a significant history of eutrophication. During 2012 and 2013, lake-wide surveys estimated surface urea concentrations and urease activity, along with phytoplankton composition and biomass, cyanobacterial toxins (microcystin), major nutrients and other physico-chemical parameters. In parallel, in situ 48-h microcosm experiments were executed to test whether different chemical forms of dissolved N could stimulate phytoplankton biomass. Results confirmed urea was a bioavailable form of N with in situ urea turnover times ranging from hours (for summer, i.e., Aug. 2012 and July 2013) to days (May 2013). Furthermore, we observed a positive correlation between urease activity and both microcystin concentrations and cyanobacterial dominance. Results also indicated a potential seasonal shift in the nutrient limiting phytoplankton biomass from phosphorus (P) to N. Our results reinforce the importance of both N and P in promoting phytoplankton growth and highlighted the need to consider organic nutrient sources as potentially important drivers of cyanobacterial blooms and toxin production.