Cyanobacterial blooms have become a serious water pollution problem in many parts of the world, and the monitoring and study of the impacts of biotoxins on human health are of vital importance. In this study, the contents of microcystin-LR, 2-methylisoborneol, and geosmin were measured in water and sediment samples from Nanwan Reservoir, China, by means of bimonthly sampling between February and December 2023. The physicochemical and hydrochemical factors and phytoplankton dynamics in the reservoir were also investigated. The results showed that the overall mean concentration of microcystin-LR (0.729 μg/L) in summer approached the guiding standard (1 μg/L) set by the WHO for drinking water. Furthermore, the content of 2-methylisoborneol (143.5 ng/L) was 14 times higher than the national standard (10 ng/L). The results of laboratory cultures showed that lower light levels and medium temperatures were suitable for the growth of Microcystis and Planktothricoides but higher temperatures promoted the synthesis and release of microcystin-LR and 2-methylisoborneol. In addition, the results of co-cultures showed that the growth of Planktothricoides was inhibited by Microcystis. Our results suggest that cyanobacterial bloom and the presence of the metabolites 2-methylisoborneol and microcystin-LR can decrease the drinking water quality of Nanwan Reservoir.