We examined the hypothesis that toxic effects of Microcystis aeruginosa to population dynamics, ephippial production, and resting egg formation of Daphnia were restricted by food quality levels. Four unicellular, toxic M. aeruginosa strains with contrasting concentration of microcystin and two Daphnia species were used in this study. The number of offspring at first reproduction, population densities, and maximum population growth rate of two Daphnia species were lower at the highest toxic M. aeruginosa 7820 treatment compared with other treatments under two concentrations of Scenedesmus obliquus. The maximum number of offspring at first reproduction of two Daphnia species appeared in the higher toxic M. aeruginosa 526 strain at the high concentration of S. obliquus. The effects of M. aeruginosa strains, S. obliquus, and their combination on the number of offspring at first reproduction and the maximum population growth rate of two Daphnia species were significant (P < 0.001). Two Daphnia species could not reproduce in the highest toxic M7820 treatment under two concentrations of S. obliquus. They had lower population size and maximum population growth rate in the higher toxic M526 treatment at the low concentration of S. obliquus, but they were higher at the high concentration of S. obliquus. This result suggests that high S. obliquus concentration could relieve the toxicity of M. aeruginosa to Daphnia, and Daphnia could utilize the lower toxic Microcystis as food. The cumulative ephippia numbers of two Daphnia species were more at the high concentration of S. obliquus than those at the low concentration. The percentage of ephippia containing no resting eggs of two Daphnia species was evidently higher at the low concentration of S. obliquus but was lower at the high concentration of S. obliquus. Our results indicated that the cumulative ephippia numbers of Daphnia were population density dependent at the high-level food, and the productions of ephippia in Daphnia were significantly controlled by microcystin concentration at the low-level food.