Freshwater reservoirs constitute an important source of drinking water, but eutrophication and higher temperatures increase the risk of more frequent blooms of cyanobacteria, including species that produce toxins. To improve the prediction of cyanotoxin episodes, we studied the annual occurrence of potential microcystin (MC) and saxitoxin (STX)-producing cyanobacteria in the Lobo reservoir, São Paulo State, Brazil. Relationships among environmental variables, cyanobacterial biomass, numbers of the mcyE and sxtA genotypes (genes encoding production of MC and STX, respectively), and concentrations of MC and STX were determined to address variables applicable for monitoring and predicting the dynamics of cyanobacteria and cyanotoxins in the reservoir. Microscopy confirmed the presence of potentially toxin-producing cyanobacteria at all sampling times, and qPCR detection showed the occurrence of both mcyE and sxtA in most samples. Concentrations of MC and STX were generally low (MC 0–1.54 µg L⁻¹; STX 0.03–0.21 µg L⁻¹). The highest MC level exceeded the recommended limit for human intake of 1 µg L⁻¹. The abundance of the mcyE and sxtA genes, as well as the toxin concentrations, were positively correlated with the biomass of Phormidium and Raphidiopsis. Among environmental variables, the abundance of potential toxic cyanobacteria was mainly affected by P limitation (high TN:TP ratios). Our data show that detection of the mcyE and sxtA genotypes serves as a useful and reliable predictor of toxin episodes but might be combined with chemical toxin detection to form an environmental toolbox for cyanotoxin monitoring.