Cyanobacterial biomass is a promising natural resource for power generation, through the reactions bio-catalyzed by electrochemically active bacteria (EAB). However, the major limitation is the involvement of Microcystin-LR (MC-LR) in inhibiting EAB activation. In this work, toxic M. aeruginosa biomass was employed as analyte of a microbial fuel cell (MFC), and sodium acetate was applied as easy-to-biodegrade co-substrate to alleviate the MC-LR stress on EAB survival. The running stability was continuously enhanced with the increment of co-substrate concentration. The sufficient co-substrate supply (6.0 mM) eliminated the negative effects of MC-LR on the cyanobacteria biomass fed-MFC performance; it contributed 12.7% extension on the electric cyclic terms and caused the productions of the power density which was comparable and even 3.8% higher than its corresponding control (MFC treated with acetate alone). The co-substrate addition also increased coulombic efficiency by 60.1%, microcystin-LR removal efficiency increased by 64.7%, and diversified the microbial community with more species able to biodegrade the MC-LR, bio-transforming the metabolites and EAB. Microcystin-degrading bacteria, such as Sphingopyxis sp., Burkholderia-Paraburkholderia, and Bacillus sp., were remarkably increased, and EAB, including Shewanella sp., Desulfovibrio desulfuricans, Aeromonas hydrophila, were also much more enriched in co-substrate use protocol. Therefore, this study verified a co-substrate strategy for simultaneously eliminating MC-LR toxin and enhancing bioelectricity generation from cyanobacterial biomass via an MFC.