Diatoms are typical representatives of the spring bloom worldwide. In several parts of the Baltic Sea, however, cold-water dinoflagellates such as Biecheleria baltica have become dominant during the past decades. We have investigated the mechanisms behind this trend by using an ecosystem model which includes the life cycles of three main phytoplankton groups (diatoms, dinoflagellates and cyanobacteria). Coupled to a water column model we have applied the model system for the period 1981–2010 to the Gulf of Finland. In agreement with observations, the model results show an increasing trend in the proportion of dinoflagellates in the Gulf of Finland. Temperature and life cycle-related processes explain the relative increase of dinoflagellates and corresponding decrease of diatoms. Warming over the 30 years has enabled a head start of dinoflagellates by reducing the time lag between germination and growth of vegetative cells. Although diatoms have a much higher growth rate, they cannot compete with the high dinoflagellate concentrations that result from the inoculum. Diatoms will only dominate in years when the inoculum concentrations of dinoflagellates or the temperatures are low. Overall, the model results suggest that consideration of life cycle dynamics of competing phytoplankton groups may be crucial to understand trends and shifts in community composition.