Cyanobacterial bloom has become a frequent and problematic feature of many freshwater bodies over a wide geographical area, especially in China. Microcystis species are widely known for their production of the potent hepatotoxins called microcystins (MCs). While the toxicity of MCs on animals, including humans, has been well studied, the biological role of MCs on the organism from which they originate has not been clearly elucidated. In this paper, we summarized MCs production, especially MCs biological function with the development of technology in recent years. We reviewed and discussed the biological role of MCs in four aspects: Serving as allelochemical, involving in photosynthesis, taking part in the wintering and recovery of Microcystis and in the sustaining and formation of Microcystis colonies. In addition, MCs may act as signal molecule inside and outside Microcystis cells, relevant research has also been reviewed. Global climatic change which favour cyanobacterial blooms in eutrophic waters, may also influence the competition between MC-producing and non-MC-producing strains and their dominance. The study on the competition between MC-producing and non-MC-producing strains and the biological role of protein-bound MCs should be focused on for further investigation, fast development of variable -omics would favor the investigation.