Prymnesium parvum produces a variety of toxic compounds, which affect other algae, grazers and organisms at higher trophic levels. Here we provide the method for development of a sensitive algal bioassay using a microalgal target, Teleaulax acuta, to measure strain variability in P. parvum toxicity, as well as the temporal stability of both the intracellular and the extracellular lytic compounds of P. parvum. We show high strain variation in toxicities after 3h incubation with LC50s ranging from 24 to 223×103cellsml−1. Most importantly we prove the necessity of testing physico-chemical properties of P. parvum toxins before attempting to isolate and characterize them. The extracellular toxin in the supernatant is highly unstable, and it loses significant lytic effects after 3 days despite storage at −20°C and after only 24h stored at 4°C. However, when stored at −80°C, lytic activity is more easily maintained. Reducing oxidation by storing the supernatant with no headspace in the vials significantly slowed loss of activity when stored at 4°C. We show that the lytic activity of the intracellular toxins, when released by sonication, is not as high as the extracellular toxins, however the stability of the intracellular toxins when kept as a cell pellet at −20°C is excellent, which proves this is a sufficient storage method for less than 3 months. Our results provide an ecologically appropriate algal bioassay to quantify lytic activity of P. parvum toxins and we have advanced our knowledge of how to handle and store the toxins from P. parvum so as to maintain biologically relevant toxicity.