Lake Chaohu, which is a large, shallow, hypertrophic freshwater lake in southeastern China, has been experiencing lake-wide toxic Microcystis blooms in recent decades. To illuminate the relationships between microcystin (MC) production, the genotypic composition of the Microcystis community and environmental factors, water samples and associated environmental data were collected from June to October 2012 within Lake Chaohu. The Microcystis genotypes and MC concentrations were quantified using quantitative real-time PCR (qPCR) and HPLC, respectively. The results showed that the abundances of Microcystis genotypes and MC concentrations varied on spatial and temporal scales. Microcystis exists as a mixed population of toxic and non-toxic genotypes, and the proportion of toxic Microcystis genotypes ranged from 9.43% to 87.98%. Both Pearson correlation and stepwise multiple regressions demonstrated that throughout the entire lake, the abundances of total and toxic Microcystis and MC concentrations showed significant positive correlation with the total phosphorus and water temperature, suggesting that increases in temperature together with the phosphorus concentrations may promote more frequent toxic Microcystis blooms and higher concentrations of MC. Whereas, dissolved inorganic carbon (DIC) was negatively correlated with the abundances of total and toxic Microcystis and MC concentrations, indicating that rising DIC concentrations may suppress toxic Microcystis abundance and reduce the MC concentrations in the future. Therefore, our results highlight the fact that future eutrophication and global climate change can affect the dynamics of toxic Microcystis blooms and hence change the MC levels in freshwater.