Nutrient release from lake sediments may increase concentrations of harmful algal toxins – such as microcystins – by stimulating blooms of toxigenic cyanobacteria. This hypothesis is supported by a series of experiments in which intact cores of sediment were incubated under different environmental conditions, after which the water overlying the sediments was harvested as a culture medium for growing a toxic strain of the common cyanobacterium Microcystis. Both littoral and profundal sediments from Lake Kinneret, the largest freshwater lake in Israel, released substantial amounts of dissolved phosphorus (1.0 and 4.0 mg.m−2.d−1, respectively) and nitrogen (44.2 and 24.3 mg.m−2.d−1, respectively) under simulated summer conditions in the laboratory. In comparison, nutrient fluxes from sediments under simulated winter conditions were considerably smaller or negative. The addition of nutrient-rich overlying water harvested from profundal sediments, and to a lesser extent from littoral sediments, increased both chlorophyll a and microcystin concentrations in Microcystis cultures. In contrast, when Microcystis cells were inoculated in natural surface waters only, the cultures did not grow or produce microcystins, and soon collapsed. This study provides experimental evidence of a link between internal nutrient loading from sediments and microcystin concentrations in freshwaters, and demonstrates how environmental factors may indirectly exert control over toxin concentrations in freshwater lakes.