In eutrophic lakes cyanobacteria are favoured relative to other phytoplankton, both under stratified and mixed conditions. During stratification, gas vacuole formation allows the accumulation of dense surface scums which attain the highest possible area‐specific photosynthetic rates in aquatic environments owing to high irradiances, near‐complete harvesting of impinging light, and minimal light inhibition and photo‐oxidation. During moderate mixing, high yields of biomass can be achieved by effective light harvesting for photosynthesis (aided by phycobilin pigments) and low maintenance energy requirements at low mean irradiances. Howevrr, nitrogen fixation competes for energy and reductant with photosynthesis, and leads to a decline of light‐saturated maximum growth rates. Wind‐driven vertical mixing and lateral advection are the main causes for the instability of cyanobacterial blooms in hyper‐eutrophic lake ecosystems.