The alga Botryococcus braunii Kützing (Chlorophyceae) present in Liyu Lake (Huanlien County, Taiwan) has toxic effects on a variety of aquatic organisms. Blooms of this alga, which typically occur in autumn, are associated with fish deaths in this lake. Experiments using 15 phytoplankton and 5 zooplankton isolated from Liyu Lake indicate that these plankton exhibit various susceptibilities to B. braunii. A close correlation between the degree of susceptibility tested in the laboratory and the absence of certain phytoplankton during B. braunii blooms in the lake was observed, suggesting allelopathic effects. Isolation, identification, and verification with authentic compounds indicated that allelochemicals were a mixture of free fatty acids, including α-linolenic, oleic, linolic, and palmitic acids. Compared with other phytoplankton isolates, B. braunii produced significantly higher amounts of free fatty acids, particularly of oleic and α-linolenic acids. The role of these fatty acids in favoring dominance of B. braunii in the natural environment was elucidated.