Algae decay is an important process influencing environmental variables and emissions of volatile sulfur compounds (VSCs) in eutrophic lakes. However, effects of algae decay on VSC emissions from eutrophic lakes as well as fate of algae-derived sulfur remain poorly understood. In this study, simulated algae-sediment systems were used to explore the flow and distribution of sulfur during algae decay. VSCs including hydrogen sulfide (H2S), methanethiol (CH3SH), carbon disulfide (CS2) and dimethyl sulfide ((CH3)2S) were detected during algae decay, which increased with algae biomass and eutrophic levels in lakes. During algae decay, the highest H2S, CH3SH and (CH3)2S emission rates of 10.45, 21.82 and 43.26 μg d−1 occurred in the first 1–2 days, respectively, while the highest CS2 emission rates were observed between days 8 and 11. The maximum emissions of H2S and CS2 from algae decay were estimated at 0.51 and 0.35 mg m−2 d−1 in Lake Taihu, accounting for 1.57% and 0.69% of the total H2S and CS2 emissions of in situ, respectively. Algae decay could significantly increase the contents of total sulfur and total carbon in sediments by 2.90%–21.11% and 4.23%–45.05%, respectively. The VSC emissions during algae decay could be predicted using the multiple regression models with the contents of total carbon, total nitrogen and sulfur-containing compounds in sediments. Partial least squares path modelling demonstrated that algae decay had a low direct effect on VSC emissions with a strength of 0.06, while it had a significant influence on environmental variables with a strength of 0.63, which could affect VSC emissions with a strength of 0.85, indicating VSC emissions from eutrophic lakes were affected by the environmental variables rather than the direct influence of algae decay. These findings illustrated the mechanisms of VSC emissions during algae decay and provided insights into VSC control and mitigation for eutrophic lakes.