AbstractOne of the most severe problems associated with eutrophication of urban freshwater ecosystems is the occurrence of increasingly frequent blooms of toxic cyanobacteria. Cyanotoxins might accumulate in the trophic web, producing diverse intoxication symptoms and chronic effects that are difficult to diagnose and prevent. High mortality of domestic animals and fish has been reported previously under these prevailing conditions. This study investigates the taxonomic composition of phytoplankton assemblages in Sheldon Lake during the summer of 2004, a year after the completion of a restoration project on the lake. The study analysed the physical and chemical changes caused by urban run‐off and artificial mixing, as well as the usefulness of microcystin molecular markers derived from the mcy gene cluster for the detection of toxic cyanobacterial strains in environmental samples from Sheldon Lake. This study clearly demonstrates that the artificial mixing rate alone was insufficient to cause a transition to a well‐mixed aquatic system, and that cyanobacteria remained dominant throughout the summer months. The presence of toxic cyanobacterial strains was confirmed with the use of molecular markers that detected the presence of the mcy gene cluster responsible for the production of toxin by Microcystis spp. This approach might have a great potential use in the routine analyses of urban aquatic ecosystems. It also might make toxicity monitoring more feasible, allowing for the early application of corrective actions, especially for cases such as Sheldon Lake, which is a public recreational focal point.