Harmful cyanobacterial blooms, reflecting advanced eutrophication, are spreading globally and threaten the sustainability of freshwater ecosystems. Increasingly, non-nitrogen (N(2))-fixing cyanobacteria (e.g., Microcystis) dominate such blooms, indicating that both excessive nitrogen (N) and phosphorus (P) loads may be responsible for their proliferation. Traditionally, watershed nutrient management efforts to control these blooms have focused on reducing P inputs. However, N loading has increased dramatically in many watersheds, promoting blooms of non-N(2) fixers, and altering lake nutrient budgets and cycling characteristics. We examined this proliferating water quality problem in Lake Taihu, China's 3rd largest freshwater lake. This shallow, hyper-eutrophic lake has changed from bloom-free to bloom-plagued conditions over the past 3 decades. Toxic Microcystis spp. blooms threaten the use of the lake for drinking water, fisheries and recreational purposes. Nutrient addition bioassays indicated that the lake shifts from P limitation in winter-spring to N limitation in cyanobacteria-dominated summer and fall months. Combined N and P additions led to maximum stimulation of growth. Despite summer N limitation and P availability, non-N(2) fixing blooms prevailed. Nitrogen cycling studies, combined with N input estimates, indicate that Microcystis thrives on both newly supplied and previously-loaded N sources to maintain its dominance. Denitrification did not relieve the lake of excessive N inputs. Results point to the need to reduce both N and P inputs for long-term eutrophication and cyanobacterial bloom control in this hyper-eutrophic system.