Microcystis aeruginosa blooms are a worldwide serious environmental problem and bloom control with bacteria is promising. In this study, a Bacillus licheniformis strain Sp34 with potent algicidal and inhibitory effects on the microcystins synthesis against fast‐growing M. aeruginosa was isolated from Dianchi Lake. Sp34 killed the bloom‐causing algal strain M. aeruginosa DCM4 of Dianchi Lake with an initial Chlorophyll‐a concentration of 2.0 mg/L at a cell density of no less than 1.35 × 105 CFU/ml. It can also efficiently kill some other harmful algal species, such as M. wesenbergii and Phormidium sp. The algicidal activity of Sp34 relied on the release of algicidal substances, which had good heat (−20°C to 121°C) and acid–base (pH 3–11) resistance. In addition, the high algicidal activity depended on the good growth of algae indicated by the significantly positive correlations between algal growth and algicidal ratio (p < .001). The algicidal effect of Sp34 involved causing oxidative stress, lipid peroxidation, and morphological injury of algal cells, along with DNA damage and dysfunction of DNA‐repair function, weakening the photosynthesis system, and inhibiting microcystin synthesis. In general, Sp34 can kill fast‐growing M. aeruginosa and inhibit algal microcystin synthesis efficiently, so, it is a promising biocontrol agent to mitigate cyanobacterial blooms.