Information on the effects of pesticide degradation on aquatic organisms is needed to properly evaluate the ecotoxicity arising from the use of pesticides and for aquatic risk assessment. This work evaluated the toxicity of diclofop-methyl (DM) and its two major metabolites, diclofop (DC) and 4-(2,4-dichlorophenoxy)-phenol (DP), to three freshwater microalgae, Chlorella pyrenoidosa, Chlorella vulgaris, and Scenedesmus obliquus. The degradation of DM in the algal suspensions was determined. Diclofop-methyl was rapidly absorbed into the cells of the tested algae, in which it was hydrolyzed to DC and further degraded to DP. The half-lives derived from the first-order kinetics indicated that DP (t1/2 = 2.47-5.80/d) degraded faster than DC (t1/2 = 6.24-12.25/d). The 4-(2,4-dichlorophenoxy)-phenol was the strongest inhibitor of algal growth, followed by DM and DC, as indicated by their EC50 values of 0.17 to 0.25, 0.42 to 2.23, and 4.76 to 8.89 mg/L, respectively. The evaluation of overall DM toxicity to tested algae in the aquatic systems thus needs to take into consideration the degradation of DM. A positive relationship appears to exist between the toxicity of DM and DC and their degradability in algal suspensions. Such a relationship, if confirmed using more pesticides and aquatic organisms, would improve the quality and efficiency of the aquatic risk assessment and management associated with pesticide use.