Cylindrospermopsis raciborskii (Wołosz.) Seenayya et Subba Raju is a planktonic filamentous cyanobacterium whose sudden worldwide proliferation and ability to produce toxins are a reason for concern. In this paper, we suggest that its ecological dominance might be explained by antagonistic interaction with other phytoplankton species due to production of allelopathic metabolites. To test this hypothesis, experiments were run with exudates of natural phytoplankton and C. raciborskii strains isolated from Lagoa Santa, a small natural lake in southeastern Brazil, where this species has become dominant in recent years. The exudates were added to different algal species obtained from the same environment and maintained in culture. After 24 h incubation, PAM fluorometry was used to compare control and treatment photosynthetic responses (relative electron transport rate) to the dissolved extracellular products. Results indicate that most of the target species were sensitive to C. raciborskii exudates, which showed strong inhibitory effects on their photosynthetic activities. These results provide evidence that allelopathy may offer a competitive benefit to C. raciborskii and contribute to its stable dominance in Lagoa Santa. A potential allelopathic advantage could also help to explain the geographic expansion of this species at midlatitudes.