To investigate how particulate materials and the toxicity of a polluted river can affect biomass production of a particle feeding organism, monthly water samples of the River Lambro were collected upstream and downstream from major pollution sources. These samples were characterized for physical and chemical endpoints, and tested for acute and chronic toxicity (7-day) using Ceriodaphnia dubia. Comparing the effects of unfiltered and filtered water samples, we showed that: (a) despite the higher contamination of the downstream reach, unfiltered (whole) downstream samples often supported a higher biomass production of C. dubia than upstream samples; (b) filtering downstream water samples and thereby removing suspended particulate matter (SPM) controlled this compensatory effect and resulted in a clear inhibition of daphnid biomass production; (c) despite the compensatory and likely nutritional role of particulate materials, an inverse relationship was found between daphnid biomass production and the content of organic carbon of SPM, as well as between the SPM organic content and the temperature of the river. These results show that SPM of the downstream reach can simultaneously exert trophic and toxic effects, and their interaction determines the final result but under the control of major system factors such as water temperature.