The ecological position of micro-algae at the base of the aquatic food web makes them critical components of aquatic ecosystems. Their short generation time also makes them useful biological indicators because they respond quickly to changes in environmental condition, enabling timely identification and assessment of water quality changes. The inclusion of micro-algae as indicators in water resource regulation and management in South Africa has started recently, their more extensive use in biomonitoring and ecotoxicology programmes for water resource management would contribute to the South African policy if water resource protection. The standard algal growth inhibition assay with the species Pseudokirchneriella subcapitata is currently used for monitoring toxicity of in-stream and industrial wastewater discharges to freshwater micro-algae. The relevance of the data generated by standard toxicity bioassays has been questioned, since micro-algae in particular are extremely variable in their sensitivity to a range of contaminants and these standard species used may not occur in the local aquatic environment. As a result, international regulatory agencies, have recommended algal growth inhibition tests be changed from a single standard species to tests with a number of species. One recommendation, in addition to the use of standard toxicity tests, is the use of species isolated from the local environment which may be more relevant for assessing site specific impacts. This study investigated the value and application of locally isolated South African freshwater micro-algae in toxicity tests for water resource management and was carried out in three phases. The first phase involved isolating micro-algae from South African aquatic resources. Micro-algae suitable for toxicity testing were identified and selected using as set of criteria. Three (Scenedesmus bicaudatus, Chlorella sorokiniana and Chlorella vulgaris) out of eight successfully isolated species satisfied the prescribed selection criteria and these were selected as potential toxicity test species. The second phase focused on refining and adapting the existing algal toxicity test protocol (the algal growth inhibition assay) for use on the locally isolated algal species. The refinement of the test protocol was achieved by exposing the locally isolated species to reference toxicants in order to assess and compare their growth and sensitivity to the toxicants under the prescribed toxicity test conditions with that of the standard toxicity test species (Pseudokirchneriella subcapitata) and a commercial laboratory species (Chlorella protothecoides). During this phase, one of the three local species (Scenedesmus bicaudatus) was eliminated as a potential toxicity test species due to inconsistent growth. The third phase of the study involved assessing the sensitivity of the two remaining species (C. vulgaris and C. sorokiniana) to a range of toxicants (reference toxicants, salts, effluents and a herbicide) and comparing it to that of the standard toxicity test species P. subcapitata and C. protothecoides. The toxicants were selected based on their relative importance in the South African context, as well as the practicality of using these local micro-algae to routinely determine the impact of these toxicants on local aquatic resources. The growth of the four micro-algae was stimulated by the selected effluents. The standard toxicity test species P. subcapitata was ranked the most sensitive and of the four species to two reference toxicants and two inorganic salts. Chlorella sorokiniana was ranked the most sensitive of the three Chlorella species to two reference toxicants and two inorganic salts. The herbicide stimulated the growth of C. vulgaris while inhibiting the growth of the other species. Pseudokirchneriela subcapitata and C. sorokiniana showed high intra-specific variability in growth, which made it difficult to determine the effective concentrations of the herbicide and therefore compare the sensitivity of the species. This varied response of micro-algal species to toxicants may result in the biodiversity shifts in aquatic ecosystems, and also supports the recommendation of using a battery of different species to support more informed decisions in water resource management.