The relationship between algae and their zooplanktonic predators typically involves consumption of nutrients by algae, grazing of the algae by zooplankton which in turn enhances predator biomass, controls algal growth and regenerates nutrients. Eutrophication raises nutrient levels, but does not simply increase normal predator–prey activity; rather, harmful algal bloom (HAB) events develop often with serious ecological and aesthetic implications. Generally, HAB species are outwardly poor competitors for nutrients, while their development of grazing deterrents during nutrient stress ostensibly occurs too late, after the nutrients have largely been consumed already by fast-growing non-HAB species. A new mechanism is presented to explain HAB dynamics under these circumstances. Using a multi-nutrient predator–prey model, it is demonstrated that these blooms can develop through the self-propagating failure of normal predator–prey activity, resulting in the transfer of nutrients into HAB growth at the expense of competing algal species. Rate limitation of this transfer provides a continual level of nutrient stress that results in HAB species exhibiting grazing deterrents protecting them from top-down control. This process is self-stabilizing as long as nutrient demand exceeds supply, maintaining the unpalatable status of HABs; such events are most likely under eutrophic conditions with skewed nutrient ratios.