Cyanobacterial hepatotoxin microcystins are a health problem found in bodies of water in Thailand. Bacteria capable of biodegrading microcystin [Dha7]MC-LR were isolated from the Bueng Nong Khot reservoir in Khon Kaen, Thailand. The bacterium Novosphingobium isolate KKU25s was shown to degrade [Dha7]MC-LR at a concentration of 25 μg l−1 at 30 °C within 24 h. Two intermediate by-products (linearized peptide and tetrapeptide) and a cluster gene (mlrA, mlrB, mlrC and mlrD) that encodes four putative enzymes involved in [Dha7]MC-LR degradation were detected in KKU25s. KKU25s was also shown to form strong biofilms in microtiter plate assays. These assays were carried out in preparation for use of the bacterium in a bioreactor for [Dha7]MC-LR degradation. In an internal airlift loop bioreactor, the biodegradation of [Dha7]MC-LR by the bacterium was established in batch and continuous flow experiments. In the batch experiment, KKU25s degraded [Dha7]MC-LR at a concentration of 25 μg l−1 at 30 °C within 24 h, whereas in the continuous flow experiment, KKU25s degraded the toxin at the same concentration within 36 h. This study demonstrated that this bacterium could potentially be used to remove microcystins from water.