The occurrence of algal blooms and the possibility of production of algal toxins and contamination of drinking water resources have become a significant concern worldwide. Advanced oxidation processes (AOPs) are currently known as one of the most effective methods to remove algal toxins. However, little is known about the formation of toxic oxidation products and how the presence of algal organic matter may affect disinfection byproducts (DBPs) formation. Microcystin (MC) is one of the most common toxins associated with freshwater harmful algal blooms. In this study, AOPs, specifically UV/H2O2 and UV/Cl2, were investigated as a means of mitigating microcystins (LR, RR and YR variants). The goal of this study is to compare mentioned advanced oxidation processes in terms of effectiveness to detoxify algal hepatotoxin microcystin and their potential to produce the regulated and unregulated disinfection byproducts, namely trihalomethanes (THMs), haloacetic acids (HAAs), and N-nitrosodimethylamine (NDMA). Protein phosphatase inhibition assay (PP2A) and Ames II were conducted to assess the toxicity of the transformation products of each toxin. Analysis of byproducts was done using GC-ECD and LC-MS/MS based on the EPA methods (551.1, 552.3, and 521) modified using recent publications. Both UV/H2O2 and UV/Cl2 processes were effective in oxidizing MC-LR, -RR, and -YR, although the relative effectiveness varied based on additional direct reaction of some of the toxins with chlorine. The background matrix had different inhibitory effects for each toxin because of their relative reactivity with radicals. Higher oxidant dose and higher UV dose helped to minimize the impact of the matrix. The effect of dissolved organic matter (DOM) as a radical scavenger was higher than the impact of nitrate, creating additional radicals. Some of the products in the UV/Cl2 process are chlorinated, but may not be toxic, as ADDA group responsible for toxicity was cleaved in most of the detectable transformation products. The formation of DBPs was affected by the background matrix. Different treatment methods did not affect the formation of the THMs. Chloroform appeared to be suppressed by nitrate and enhanced by DOM. The background matrix also impacted HAAs formation. However, there was no correlation between the type of treatment process or level of treatment and HAAs formation. Both nitrate and algal DOM increased the formation of NDMA. NDMA was below the threshold of 10 ng/L followed by some states in all samples even though the nitrate and algal DOM concentration in this study was at a high end of the environmentally relevant range.