Background: The loss of photosynthesis has occurred often in eukaryotic evolution, even more than its acquisition, which occurred at least nine times independently and which generated the evolution of the supergroups Archaeplastida, Rhizaria, Chromalveolata and Excavata. This secondary loss of autotrophic capability is essential to explain the evolution of eukaryotes and the high diversity of protists, which has been severely underestimated until recently. However, the ecological and evolutionary scenarios behind this evolutionary ‘‘step back’’ are still largely unknown. Methodology/Principal Findings: Using a dynamic model of heterotrophic and mixotrophic flagellates and two types of prey, large bacteria and ultramicrobacteria, we examine the influence of DOC concentration, mixotroph’s photosynthetic growth rate, and external limitations of photosynthesis on the coexistence of both types of flagellates. Our key premises are: large bacteria grow faster than small ones at high DOC concentrations, and vice versa; and heterotrophic flagellates are more efficient than the mixotrophs grazing small bacteria (both empirically supported). We show that differential efficiency in bacteria grazing, which strongly depends on cell size, is a key factor to explain the loss of photosynthesis in mixotrophs (which combine photosynthesis and bacterivory) leading to purely heterotrophic lineages. Further, we show in what conditions an heterotroph mutant can coexist, or even out-compete, its mixotrophic ancestor, suggesting that bacterivory and cell size reduction may have been major triggers for the diversification of eukaryotes. Conclusions/Significance: Our results suggest that, provided the mixotroph’s photosynthetic advantage is not too large, the (small) heterotroph will also dominate in nutrient-poor environments and will readily invade a community of mixotrophs and bacteria, due to its higher efficiency exploiting the ultramicrobacteria. As carbon-limited conditions were presumably widespread throughout Earth history, such a scenario may explain the numerous transitions from phototrophy to mixotrophy and further to heterotrophy within virtually all major algal lineages. We challenge prevailing concepts that affiliated the evolution of phagotrophy with eutrophic or strongly light-limited environments only.