Freshwater biodiversity loss potentially disrupts ecosystem services related to water quality and may negatively impact ecosystem functioning and temporal community turnover. We analysed a data set containing phytoplankton and zooplankton community data from 131 lakes through 9 years in an agricultural region to test predictions that plankton communities with low biodiversity are less efficient in their use of limiting resources and display greater community turnover (measured as community dissimilarity). Phytoplankton resource use efficiency (RUE = biomass per unit resource) was negatively related to phytoplankton evenness (measured as Pielou's evenness), whereas zooplankton RUE was positively related to phytoplankton evenness. Phytoplankton and zooplankton RUE were high and low, respectively, when Cyanobacteria, especially Microcystis sp., dominated. Phytoplankton communities displayed slower community turnover rates when dominated by few genera. Our findings, which counter findings of many terrestrial studies, suggest that Cyanobacteria dominance may play important roles in ecosystem functioning and community turnover in nutrient-enriched lakes.