Many dinoflagellates perform sexual reproduction and form cysts as a life history strategy to survive adverse environmental conditions and seed annual harmful algal blooms (HABs). The molecular mechanisms underpinning the life stage transitions can provide clues about how key environmental factors induce encystment and initiation of a HAB but are still poorly understood. Here, we conducted an integrated physiological and transcriptomic study to unravel the mechanisms in Scrippsiella acuminata. We established a culture from a bloom, induced cyst formation, and divided the process into four life stages. Transcriptomic analysis of these stages revealed 19,900 differentially expressed genes (DEGs). The expression of genes related to photosynthesis was significantly up-regulated from vegetative stage to immature cyst stage, consistent with the marked increase in cell contents of energy-storing macromolecules (carbohydrates and lipids). When proceeding to resting cysts, most photosynthesis genes were down-regulated while “genetic information processing” related genes were up-regulated. Comparing germinating cysts with resting cysts revealed 100 DEGs involved in energy metabolism, indicating a high energy requirement of germination. In addition, the transition from germinating cysts to vegetative cells featured up-regulation of photosynthesis. Our results demonstrate that energy storage and consumption play a pivotal role in cyst formation and germination respectively and genetic information processing is crucial in cyst dormancy.