There arose one of the most important ecological transitions in Earth’s history approximately 750 million years ago during the middle Neoproterozoic Era (1000 to 541 million years ago, Ma). Biomarker evidence suggests that around this time there was a rapid shift from a predominantly bacterial-dominated world to more complex ecosystems governed by eukaryotic primary productivity. The resulting ‘Rise of the algae’ led to dramatically altered food webs that were much more efficient in terms of nutrient and energy transfer. Yet, what triggered this ecological shift? In this study we examined the theory that it was the alleviation of phosphorus (P) deficiency that gave eukaryotic alga the prime opportunity to flourish. We performed laboratory experiments on the cyanobacterium Synechocystis salina and the eukaryotic algae Tetraselmis suecica and examined their ability to compete for phosphorus. Both these organisms co-occur in modern European coastal waters and are not known to have any allelopathic capabilities. The strains were cultured in mono and mixed cultures in chemostats across a range of dissolved inorganic phosphorus (DIP) concentrations to reflect modern and ancient oceanic conditions of 2 μM P and 0.2 μM P, respectively. Our results show that the cyanobacteria outcompete the algae at the low input (0.2 μM P) treatment, yet the eukaryotic algae were not completely excluded and remained a constant background component in the mixed-culture experiments. Also, despite their relatively large cell size, the algae T. suecica had a high affinity for DIP. With DIP input concentrations resembling modern-day levels (2 μM), the eukaryotic algae could effectively compete against the cyanobacteria in terms of total biomass production. These results suggest that the availability of phosphorus could have influenced the global expansion of eukaryotic algae. However, P limitation does not seem to explain the complete absence of eukaryotic algae in the biomarker record before ca. 750 Ma.