Residents in many developing countries store treated drinking water in tanks or reservoirs because of intermittent and infrequent water supplies. Many studies have focused on bacterial contamination of domestic reservoir waters, the cyanobacterial and algal contamination is largely unexplored. Therefore, the present study investigates toxic cyanobacteria and their microcystin (MC) toxins in some domestic water storage reservoirs in Egypt as an example for developing countries. Three phytoplankton groups including cyanobacteria, green algae and diatoms were found in domestic reservoirs. Among these species, the toxic cyanobacterium Microcystis aeruginosa had the highest cell density during warm months (4.2–5.92 cells × 106 L–1). This cell density increased along the time, indicating that environmental conditions in these reservoirs promoted the proliferation of this species. Intra- and extracellular MCs were also detected in reservoir waters at concentrations of 3.5–40 and 1–7.6 μg L–1, respectively, exceeding the WHO guideline limit of 1 μg L–1 for these toxins in drinking water. Heterotrophic bacteria were found in association with cyanobacteria in reservoir waters. The study suggests that treated-water storage reservoirs should be monitored for the presence of toxic cyanobacteria to protect the public from exposure to their potent toxins.