Phytoplankton communities are responsible for half of Earth’s net primary productivity and their community composition is a regulator of many biogeochemical cycles and food web dynamics. Bacteria associated with phytoplankton have been shown to affect host fitness, either negatively or positively, but how these associated microbiomes influence phytoplankton interspecific interactions and coexistence remains untested. We carried out a series of experiments using both eukaryotic green algae as well as the harmful bloom-forming cyanobacterium Microcystis aeruginosa to test whether microbiomes alter the strength of interactions among their hosts. Specifically, we tested whether microbiomes altered the sensitivity of its host to compete with an established species by performing competition assays between hosts grown either without or with associated bacteria. Among eukaryotic green algae, we found that host microbiomes reduced the sensitivity of phytoplankton to interspecific competition in half of all pairwise comparisons tested. Although microbiomes changed the magnitude of interspecific interactions, bacteria did not fundamentally alter the type of host ecological interaction observed (i.e., competition vs. facilitation). For competition between M. aeruginosa and green algae, we found that host-associated bacteria increased population densities of M. aeruginosa when competing with an established green algal culture. Conversely, when M. aeruginosa was dominant, green algae were only able to grow in the absence of host-associated bacteria. Our results suggest a sizable role of host-associated bacteria in the competitive and facilitative interactions that control phytoplankton biodiversity and community composition, including their importance in the establishment and persistence of freshwater cyanobacterial blooms.