The end-Permian mass extinction was followed by the formation of an enigmatic rock layer with a distinctive macroscopic spotted or dendroid fabric. This deposit has been interpreted as microbial reef rock, digitate dendrolite, digital thrombolite, dendritic thrombolite, or bacterial deposits. Agreement has been reached in considering them as microbialites, but not in their formation. This study has revealed that the spotted and dendroid microbialites were composed of numerous fossil casts formed by the planktic cyanobacterium, Microcystis, a coccoid genus that at the present-day commonly forms blooms in modern lakes, rivers, and reservoirs. The abundance of the fossils and the diagenesis they experienced has determined the macroscopic fabric: where they abundant, the rock appears as dendroid, otherwise, it appears as spotted. The ancient Microcystis bloom might produce toxin to kill other metazoans, and be responsible for the oceanic anoxia that has puzzled so many researchers for so many years.