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Eutrophication of inland waters is expected to increase the frequency and severity of harmful algal blooms (HABs). Toxin-production associated with HABs has negative effects on human health and aquatic ecosystem functioning. Despite evidence that flagellates can ingest toxin-producing cyanobacteria, interactions between members of the microbial loop are underestimated in our understanding of the food web and algal bloom dynamics. Physical and allelopathic interactions between a mixotrophic flagellate (Cryptomonas sp.) and two strains of a cyanobacteria (Microcystis aeruginosa) were investigated in a full-factorial experiment in culture. The maximum population growth rate of the mixotroph (0.25 day−1) occurred during incubation with filtrate from toxic M. aeruginosa. Cryptomonas was able to ingest toxic and non-toxic M. aeruginosa at maximal rates of 0.5 and 0.3 cells day−1, respectively. The results establish that although Cryptomonas does not derive benefits from co-incubation with M. aeruginosa, it may obtain nutritional supplement from filtrate. We also provide evidence of a reduction in cyanotoxin concentration (microcystin-LR) when toxic M. aeruginosa is incubated with the mixotroph. Our work has implications for “trophic upgrading” within the microbial food web, where cyanobacterivory by nanoflagellates may improve food quality for higher trophic levels and detoxify secondary compounds.