Cyanobacteria produce an unparalleled variety of toxins that can cause severe health problems or even death in humans, and wild or domestic animals. In the last decade, biosynthetic pathways have been assigned to the majority of the known toxin families. This review summarizes current knowledge about the enzymatic basis for the production of the hepatotoxins microcystin and nodularin, the cytotoxin cylindrospermopsin, the neurotoxins anatoxin and saxitoxin, and the dermatotoxin lyngbyatoxin. Elucidation of the biosynthetic pathways of the toxins has paved the way for the development of molecular techniques for the detection and quantification of the producing cyanobacteria in different environments. Phylogenetic analyses of related clusters from a large number of strains has also allowed for the reconstruction of the evolutionary scenarios that have led to the emergence, diversification, and loss of such gene clusters in different strains and genera of cyanobacteria. Advances in the understanding of toxin biosynthesis and evolution have provided new methods for drinking-water quality control and may inspire the development of techniques for the management of bloom formation in the future.