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Objective To isolate and characterize indigenous algicidal bacteria and their algae-lysing compounds active against Microcystis aeruginosa, strains TH1, TH2, and FACHB 905. Methods The bacteria were identified using the Biolog automated microbial identification system and 16S rDNA sequence analysis. The algae-lysing compounds were isolated and purified by silica gel column chromatography and reverse-phase high performance liquid chromatography. Their structures were confirmed by Nuclear Magnetic Resonance (NMR) and Fourier Transform Infrared (FT-IR) spectroscopy. Algae-lysing activity was observed Using microscopy. Results The algae-lysing bacterium LTH-2 isolated from Lake Taihu was identified as Serratia marcescens. Strain LTH-2 secreted a red pigment identified as prodigiosin (C20H25N30), which showed strong lytic activity with algal strains M. aeruginosa TH1, TH2, and FACHB 905 in a concentration-dependent manner. The 50% inhibitory concentration (IC50) of prodigiosin with the algal strains was 4.8 (±0.4)x10-2 μg/mL, 8.9 (±1.1)x10-2 μg/mL, and 1.7 (±0.1)x10-1 μg/mL in 24 h, respectively. Conclusion The bacterium LTH-2 and its pigment had strong Microcystis-lysing activity probably related to damage of cell membranes. The bacterium LTH-2 and its red pigment are potentially useful for regulating blooms of harmful M. aeruginosa. [ABSTRACT FROM AUTHOR]