The effect of potassium permanganate as preoxidant for algae-laden source water and the mechanism that it causes algae cells aggregation was investigated. Synthetic algae suspensions, prepared from lab-cultured Chodatella sp., were used for batch preoxidation and settling tests. In order to study the effect of water hardness on the function of permanganate, some algae suspensions were spiked with CaCl2 solution. Experiments with preformed MnO2 to look into its effect on algae cell aggregation were also conducted. The results show that preoxidation with potassium permanganate would promote the aggregation of algae cells, and this phenomenon was even more significant with the existence of hardness causing ion, calcium. In addition to incorporating its reducing product, MnO2, into algae floc, and increased its specific gravity, and therefore its settling velocity, permanganate may also induce the release of extracellular organic matters (EOM) from algae cell. Based on SEM observation, EOM probably enhanced the incorporation of MnO2 into algae floc. The role played by calcium ion in promoting the function of permanganate can be explained by charge neutralization and also bridging between negatively charged surfaces.