Superior antagonistic activity against axenic Microcystis aeruginosa PCC7806 was observed with Paucibacter sp. B51 isolated from cyanobacterial bloom samples among 43 tested freshwater bacterial species. Complete genome sequencing, analyzing average nucleotide identity and digital DNA-DNA hybridization, designated the B51 strain as Paucibacter aquatile. Electron and fluorescence microscopic image analyses revealed the presence of the B51 strain in the vicinity of M. aeruginosa cells, which might provoke direct inhibition of the photosynthetic activity of the PCC7806 cells, leading to perturbation of cellular metabolisms and consequent cell death. Our speculation was supported by the findings that growth failure of the PCC7806 cells led to low pH conditions with fewer chlorophylls and down-regulation of photosystem genes (e.g., psbD and psaB) during their 48-h co-culture condition. Interestingly, the concentrated ethyl acetate extracts obtained from B51-grown supernatant exhibited a growth-inhibitory effect on PCC7806. The physical separation of both strains by a filter system led to no inhibitory activity of the B51 cells, suggesting that contact-mediated anti-cyanobacterial compounds might also be responsible for hampering the growth of the PCC7806 cells. Bioinformatic tools identified 12 gene clusters that possibly produce secondary metabolites, including a class II lasso peptide in the B51 genome. Further chemical analysis demonstrated anti-cyanobacterial activity from fractionated samples having a rubrivinodin-like lasso peptide, named paucinodin. Taken together, both contact-mediated inhibition of photosynthesis and the lasso peptide secretion of the B51 strain are responsible for the anti-cyanobacterial activity of P. aquatile B51.