Algicidal bacteria are important in the control of toxic dinoflagellate blooms, but studies on the environmental behavior of related algal toxins are still lacking. In this study, Bacillus subtilis S3 (S3) showed the highest algicidal activity against Alexandrium pacificum (Group IV) out of six Bacillus strains. When treated with 0.5% (v/v) S3 bacterial culture and sterile supernatant, the algicidal rates were 69.74% and 70.22% at 12 h, respectively, and algicidal substances secreted by S3 were considered the mechanism of algicidal effect. During the algicidal process, the rapid proliferation of Alteromonas sp. in the phycosphere of A. pacificum may have accelerated the algal death. Moreover, the algicidal development of S3 released large amounts of intracellular paralytic shellfish toxins (PSTs) into the water, as the extracellular PSTs increased by 187.88% and 231.47% at 12 h, compared with the treatment of bacterial culture and sterile supernatant at 0 h, respectively. Although the total amount of PSTs increased slightly, the total toxicity of the algal sample decreased as GTX1/4 was transformed by S3 into GTX2/3 and GTX5. These results more comprehensively reveal the complex relationship between algicidal bacteria and microalgae, providing a potential source of biological control for harmful algal blooms and toxins.