Toxic algal blooms are a significant threat to both water ecosystems and human health. The identification and quantification of these toxins are crucial for effective water quality management. This study collected data using field measurements and laboratory experiments. PCR techniques were used to target the specific 16S rRNA gene of blue-green algae in genomic DNA extracted from water samples containing algal cells and blooms and microcystin levels measured using chromatographic technique (LC-MS/MS) from the Mindu and Nyumba ya Mungu Dams in Tanzania. Linear regression was used to assess the relationships between algal blooms and water quality variables. The results indicated that blue-green algae in Mindu Dam were significantly influenced by NO3-, pH, and PO43−, while in Nyumba ya Mungu Dam, the blue-green algae were significantly influenced by PO43−. The DNA results confirmed the existence of toxin-producing Microcystis aeruginosa in both dams. The genetic sequences from this study matched those in the GenBank database, with uncultured samples showing 85% to 100% similarity and cultured samples showing 81% to 100% similarity. The prevalence of toxins followed the order: MC-YR > MC-LR > MC-RR in Mindu Dam and MC-LR > MC-YR > MC-RR for Nyumba ya Mungu Dam, but all were within the acceptable drinking and recreational water limits as per WHO standards. The study revealed differences in water quality parameters between the two dams in which Mindu Dam exhibited higher nitrate concentrations than Nyumba ya Mungu Dam. The combined nutrient levels in both dams indicated increased nutrient loading from human activities. The study confirms the presence of toxin-producing Microcystis aeruginosa in both dams and shows these strains are producing microcystins. These findings provide crucial information for water quality management decisions and interventions, offering evidence on the causes, drivers, and status of harmful algal blooms in Tanzania freshwater reservoirs.