The spatio-temporal distribution of environmental factors, chlorophyll-a (Chl-a), and microcystins (MCs) in a shallow lake, Lake Taihu (China), were investigated from 2009 to 2011 on a monthly basis at nine sampling stations. The annual mean concentration ranges of total nitrogen (TN), total phosphorus (TP), Chl-a, MC-LR and MC-RR were 0.17–10.53 mg/L, 0.027–0.581 mg/L, 0.10–129.75 µg/L, 0.013–2.019 µg/L and 0.002–0.794 µg/L, respectively. The average TN, ammonium (NH4+) and TP concentrations in Meiliang Bay decreased from 3.54 to 2.26 mg/L, 0.63 to 0.31 mg/L and 0.150 to 0.124 mg/L, respectively, when compared with values from 2006–2008, indicating that water quality has improved in severe cyanobacterial bloom areas in recent years. Additionally, the distribution of MCs was northern lake areas > western lake areas > central lake areas > macrophyte-dominated areas. Correlation analysis revealed that nutrients were the most important variable accounting for the variation of extracellular MC-LR concentration in heavy cyanobacterial bloom areas of Lake Taihu. During the study period, the maximum MCs concentration reached 2.75 ± 0.27 μg/L in the bloom period in the northern lake areas, which is more than two times the safety limit of 1 μg/L MCs required for drinking water. However, microcystins decreased gradually as the water quality improved from 2009 to 2011, indicating that the risk of MCs exposure was slightly decreased in Lake Taihu.