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The response of phytoplankton assemblages to the closure of urban sewage outfalls (USOs) was examined for the Mar Piccolo of Taranto (Mediterranean Sea), a productive semi-enclosed coastal marine ecosystem devoted to shellfish farming. Phytoplankton dynamics were investigated in relation to environmental variables, with a particular emphasis on harmful algal blooms (HABs). Recent analyses evidenced a general reduction of the inorganic nutrient loads, except for nitrates and silicates. Also phytoplankton biomass (chlorophyll a) and abundances were characterized by a decrease of the values, except for the inner area of the basin (second inlet). The phytoplankton composition changed, with nano-sized species, indicators of oligotrophic conditions, becoming dominant over micro-sized species. If the closure of the USOs affected phytoplankton dynamics, however, it did not preserve the Mar Piccolo from HABs and anoxia crises. About 25 harmful species have been detected throughout the years, such as the potentially domoic acid producers Pseudo-nitzschia cf. galaxiae and P seudo-nitzschia cf. multistriata, identified for the first time in these waters. The presence of HABs represents a threat for human health and aquaculture. Urgent initiatives are needed to improve the communication with authorities responsible for environmental protection, economic development, and public health for a sustainable mussel culture in the Mar Piccolo.