Despite the extensive studies on silver nanoparticle (AgNP) toxicity, the contribution of released silver ions to the toxicity still remains debatable. This study investigated the toxicity of AgNPs with different sizes (20 and 60 nm) toward a phytoplankton Euglena gracilis, with a focus on evaluating the contributions of dissolved Ag to the toxicity by combining a newly developed aggregation-induced emission luminogen (AIEgen)-based imaging technique and a traditional inductively coupled plasma mass spectrometry (ICP-MS) method. Smaller AgNPs, which dissolved much faster, exhibited greater toxicity, as evidenced by lower 50% growth inhibition concentration (EC50). However, the average Ag+ concentration at each EC50 was comparable to the EC50 of AgNO3, and similar subcellular Ag distribution patterns were observed in both AgNPs and AgNO3 exposed algae. More silver ions were internalized in algae treated with smaller AgNPs. With the application of luminogen imaging technology, we for the first time demonstrated that few Ag(I) were presented intracellularly in algae exposed to AgNPs when any released Ag in the medium was complexed by cysteine. Ag(I) was mainly distributed in cellular debris, organelles, and metal-rich granules fractions. No conclusive evidence for AgNP internalization was documented. Our results strongly suggested that Ag+ released from AgNPs extracellularly dominated the AgNP toxicity. The findings of this work provide new and useful insight into the toxicity of AgNPs in aquatic environments.