The phytoplankton species composition and seasonal succession were examined in Lake Kastoria during the period November 1998–October 1999. A total of 67 species and 19 functional groups were identified. Only 4 out of the 67 species, all Cyanobacteria, were dominant (Limnothrix redekei, Microcystis aeruginosa, Cylindrospermopsis raciborskii and Aphanizomenon gracile). Diatoms were rare, not only in terms of species number, but also in terms of biomass (contributing <5% to the total phytoplankton biomass) in relation to the rather low silicon concentrations throughout the year. The functional groups S1, SN, M and H1 were found dominant in the lake. The species A. gracile (functional group H1) behaved like the species Cylindrospermopsis raciborskii (functional group SN) which is tolerant to mixing and poor light conditions. The phytoplankton seasonal succession showed similar patterns in all six sampling stations, both at the surface and the bottom water layer, with minor differences during Microcystis aeruginosa dominance. Two steady-state phases were identified within a year lasting for 4 months under relatively stable physical conditions. In these steady-states, the Limnothrix redekei persistent dominance under low light availability and low inorganic nitrogen has been explained by its specific ability such as buoyancy regulation to exploit resources in the water column. Moreover, high population densities over the winter and before the development of daphnids may contribute to the steady-state dominance of Limnothrix. Different niches separated vertically in the water column is one of the explanations for the Limnothrix–Microcystis steady-state when a replacement between the two species was observed in different water layers and areas of the lake. Long lasting steady-states of Cyanobacteria observed in Lake Kastoria and in other Mediterranean and tropical freshwaters may indicate influence of warm climate properties on phytoplankton dynamics.