Eutrophication is one of the most widespread environmental problems of inland waters. The use of submerged macrophytes might be an alternative method of eutrophication control as it is environmentally safe and cost effective. A study was made between August 2016 and May 2017 to assess the impact of Potamogeton schweinfurthii in structuring plankton community and to test whether extract of P. schweinfurthii can negatively affect the biomass of phytoplankton community in Lake Hawassa. The allelopathic effects of the submerged macrophyte P. schweinfurthii on natural phytoplankton and Microcystis spp were tested under controlled laboratory conditions and field incubation experiments. There was spatial variation in species composition and abundance of zooplankton between open water and P. schweinfurthi stand (t-test, p < 0.05) which was significantly higher in the open water (133, 525±15, 723 ind/m3). Mean phytoplankton biomass was also the highest in the open water (24.8±5.1 μg/l). Field incubation experiments showed that phytoplankton biomass increased at slow rate (by 46.8 %) when incubated with P. schweinfurthii exudate but by 189.8% in the control bottles (without P. schweinfurthii exudate). Furthermore, the laboratory experiments indicated that phytoplankton growth was inhibited when exposed to P. schweinfurthii extract. The methanol fraction of aqueous extract from P. schweinfurthii analyzed by gas chromatograph-mass spectrometry (GC-MS) indicated a total of 46 Active compounds exuded in the medium or present in plant tissue. These results implied that there could be allelopathic interaction between P. schweinfurthii and the phytoplankton population in Lake Hawassa, but further research is required to identify the active principle in the extract. Key words: Allelochemicals, allelopathy, extract, exudates, gas chromatograph-mass spectrometry, incubation, Microcystis spp, P. schweinfurthi