Toxin production during cyanobacterial blooms poses a significant public health threat in water bodies globally and requires the development of effective bloom management strategies. Previously, synthesis of the hepatotoxin microcystin has been proposed to be regulated by iron availability, but the contribution of the toxin to the adaptation of cyanobacteria to environmental stresses, such as changing light intensity and nutrient limitation, remains unclear. The aim of this study was to compare the iron stress response in toxic and non-toxic strains of Microcystis aeruginosa subjected to moderate and severe iron limitation. The transcription of a number of genes involved in iron uptake, oxidative stress response, toxin synthesis and transcriptional control of these processes was accessed by quantitative real-time PCR (qRT-PCR). The process of adaptation of M. aeruginosa to iron stress was found to be highly dynamic and strain-specific. Toxin production in PCC 7806 increased in an iron-dependent manner and appeared to be regulated by FurA. The inability to produce microcystin, either due to natural mutations in the mcy gene cluster or due to insertional inactivation of mcyH, affected the remodelling of the photosynthetic machinery in iron-stressed cells, the transport of Fe(II) and transcription of the Fur family of transcriptional regulators. The presence of the toxin appears to give an advantage to microcystin-producing cyanobacteria in the early stages of exposure to severe iron stress and may protect the cell from reactive oxygen species-induced damage.