1. Exotic invasive species modify natural food webs in a way frequently hard to predict. In several aquatic environments in Brazil the introduction of Oreochromis niloticus (tilapia) was followed by changes in water quality. Yet, because of its rapid and easy growth, this fish has been used in many aquaculture programmes around the country.

2. To measure the effects of tilapia on the phytoplankton community and on water conditions of a large tropical reservoir in south‐eastern Brazil (Furnas Reservoir), we performed two in situ experiments using three controls (no fish) and three tilapia enclosures (high fish density). Abiotic and biotic parameters were measured at 4 day intervals for 28 days.

3. Fish presence increased nitrogen (N) and phosphorus (P) availability (ammonium 260 and 70% mean increase – first and second experiment; and total phosphorus 540 and 270% mean increase) via excretion. Nutrient recycling by fish can thus be significant in the nutrient dynamics of the reservoir. The higher chlorophyll a concentration in the experimental fish tanks (86 and 34 μg L⁻¹, first and second experiment, respectively) was the result of a positive bottom‐up effect on the phytoplankton community (approximately 2 μg L⁻¹ in the reservoir and control tank).

4. Because tilapia feed selectively on large algae (mainly cyanobacteria and diatoms), several small‐sized or mucilaginous colonial chlorophyceans proliferated at the end of the experiments. Thus, the trophic cascade revealed strong influences on algal composition as well as on biomass.

5. Tilapia can contribute to the eutrophication of a waterbody by both top‐down and bottom‐up forces. In particular, by supplying considerable amount of nutrients it promotes the increase of fast growing algae. Tilapia must be used cautiously in aquaculture to avoid unexpected environmental degradation.