Cyanobacteria are photosynthetic, prokaryotic microorganisms commonly found among the phytoplankton of stagnant waters. Some of them produce toxins and these have been implicated to contribute to environmental health problems including kidney disease of uncertain etiology. This paper is a review of published literature on freshwater cyanobacteria of Sri Lanka with special emphasis on toxigenic genera. It is evident that the freshwater cyanobacterial populations of Sri Lanka have undergone significant changes from the beginning of the 20th century until recent times. While toxigenic genera such as Microcystis and Cylindrospermopsis have been observed occasionally during the early 20th century they have now become dominant in most of our waters except in those whose catchment areas are protected forests devoid of human habitation. Eutrophication through nutrient loading and other sources of pollution by anthropogenic activities triggers off cyanobacterial bloom formation which is an environmental health hazard. Minimizing pollution of lentic water bodies by the reduction of the use of chemical fertilizer and other agro-chemicals, restoration of riparian vegetation, biomanipulation to control cyanobacterial populations and breakdown of cyanotoxins through chemical, physical and microbiological methods have been proposed for the amelioration of this hazard. Extensive research studies on such aspects are warranted to develop solutions to overcome this environmental problem.