Eutrophication has been one of the largest environmental problems in aquatic ecosystems during the past decades, leading to dense, and often toxic, cyanobacterial blooms. In a way to counteract these problems many lakes have been subject to restoration through biomanipulation. Here we combine 13 years of monitoring data with experimental assessment of grazing efficiency of a naturally occurring zooplankton community and a, from a human perspective, desired community of large Daphnia to assess the effects of an altered trophic cascade associated with biomanipulation. Lake monitoring data show that the relative proportion of Daphnia spp. grazers in June has increased following years of biomanipulation and that this increase coincides with a drop in cyanobacterial biomass and lowered microcystin concentrations compared to before the biomanipulation. In June, the proportion of Daphnia spp. (on a biomass basis) went from around 3% in 2005 (the first year of biomanipulation) up to around 58% in 2012. During months when the proportion of Daphnia spp. remained unchanged (July and August) no effect on lower trophic levels was observed. Our field grazing experiment revealed that Daphnia were more efficient in controlling the standing biomass of cyanobacteria, as grazing by the natural zooplankton community never even compensated for the algal growth during the experiment and sometimes even promoted cyanobacterial growth. Furthermore, although the total cyanobacterial toxin levels remained unaffected by both grazer communities in the experimental study, the Daphnia dominated community promoted the transfer of toxins to the extracellular, dissolved phase, likely through feeding on cyanobacteria. Our results show that biomanipulation by fish removal is a useful tool for lake management, leading to a top-down mediated trophic cascade, through alterations in the grazer community, to reduced cyanobacterial biomass and lowered cyanobacterial toxin levels. This improved water quality enhances both the ecological and societal value of lakes as units for ecosystem services.