Cyanobacteria are known to negatively affect their herbivores either by being of low nutritional value, by clogging the feeding apparatus or by producing toxins, and specifically, the role of toxins has been debated. Hence, in order to assess to what extent cyanobacterial toxins affect a major herbivore (Daphnia magna) that has had previous experience of cyanobacterial toxins, we conducted a life-table study using two otherwise-similar strains of Microcystis aeruginosa, one producing and one not producing the toxin microcystin. In contrast to previous studies, we found that Daphnia population growth was positive (r > 0.1 day(-1)) on a diet containing toxic Microcystis. However, we also found that the presence of the toxin negatively affected early survival and population growth of a microcystin-tolerant D. magna clone. Although there was no effect of toxin presence on per-capita fecundity of surviving adults, Daphnia produced smaller neonates when fed toxin-containing M. aeruginosa than when fed the non-toxic mutant. Hence, although Daphnia survival, population growth and neonate size were negatively affected by microcystin presence, Daphnia populations that have prior experience with toxic cyanobacteria may show positive population growth even at high concentrations of cyanobacterial toxins. This conclusion may have considerable implications for interactions between toxic cyanobacteria and herbivores in natural systems.