Waterborne and dietborne exposure are both important sources for the accumulation of inorganic arsenic (iAs) in aquatic organisms. Although the waterborne toxicity of iAs has been extensively investigated, its dietborne toxicity has received little attention. The present study examined the acute and chronic toxicity of arsenate (iAsV) and arsenite (iAsIII) to the freshwater zooplankton species Daphnia magna under both waterborne and dietborne exposure scenarios. The bioaccumulation, speciation, and tissue and subcellular distributions of arsenic were analyzed to understand the mechanisms accounting for differences in toxicity related to different arsenic species, exposure scenarios, and exposure duration. The toxicity of iAs increased with exposure time, and iAsIII was more toxic than iAsV. Moreover, although dietborne iAs had no acute effect on D. magna, it incurred significant toxicity in the chronic-exposure experiment. Nevertheless, the toxicity of dietborne iAs was still lower than that of waterborne iAs regardless of the exposure duration. This difference was found to be caused by the lower bioaccumulation of dietborne iAs, its higher distribution in the gut and in the biologically detoxified subcellular fraction, and greater transformation to the less toxic dimethylarsinic acid. Overall, the dietborne toxicity of iAs should be considered when evaluating the environmental risks posed by arsenic.