The link between compensatory dynamics and regime shifts is not well understood. We analyse a regime shift in phytoplankton in a large lake with respect to: (1) environmental forcing and (2) the type of dynamics (compensatory or synchronous) between phytoplankton groups. The regime shift in phytoplankton was related to gradual changes in nutrient levels, but unrelated to an almost concurrent shift in climatic conditions. The relationship between total phytoplankton biomass and phosphorus concentrations was sigmoid. Trajectories of phytoplankton biomass and community dynamics suggest that eutrophication effects can successfully be reversed when management efforts decrease nutrient loading to a level sufficiently low to overcome community resilience. The regime shift was associated with a loss of biomass compensation and compensatory dynamics among the phytoplankton groups. This suggests that the type of interactions is important for a better understanding of the existence and shape of nonlinear responses of phytoplankton biomass to environmental change.