Some mat-forming cyanobacteria produce harmful cyanotoxins, yet benthic species remain understudied compared to planktonic counterparts. This study assesses the diversity, distribution and toxin production of mat-forming cyanobacteria across lentic and lotic systems in Nova Scotia, Canada. We documented greater cyanobacterial species richness in lentic environments, with six dominant species distributed into two major Microcoleus clades, five of which represent putative novel taxa. Two Microcoleus species with the genetic repertoire to produce anatoxins were prevalent. One has been previously reported in Canada, while the second represents a novel species found exclusively in an environment impacted by discharge from a water treatment plant. We observed variability in the gene clusters responsible for the biosynthesis of anatoxin-a and associated analogues (ATXs), including the discovery of a novel anaG variant with a ~ 1.7 kb insertion in a Microcoleus strain dominating homoanatoxin-producing mats. This extended anaG, encoding a polyketide synthase with an additional methyltransferase domain, coexists with shorter variants, leading to the production of a mixture of ATXs. These findings highlight the genetic diversity of benthic cyanobacteria in freshwater environments, with Microcoleus as the primary contributor to the production of ATXs in both lentic and lotic systems, underscoring their potential to produce harmful toxins.