Taihu Lake is a major water source for part of Yangtze Delta, which is one of the most urbanized and economically prosperous areas in China. In last couple of decades, some parts of the lake were highly polluted due to eutrophication. This study analyzed dioxin-like potential and mutagenic potential in surface water samples from Taihu Lake. The samples were prepared by XAD-2 resin procedure. A batch of biological assays, including dioxin-like potential microassay with the rat hepatocyte cell line H411E, and Ames test was employed in the research. Results showed that jour water samples have high content of dioxin-like biological potential, the highest activity TEQ to 2,3,7,8-TCDD was 48 pg/ι in sample 1. The mutagenic effect with reading-frame shifting mechanism was confirmed in 3 of 4 samples. The effective sewage treatment facilities and reliable monitoring surveillance system are urgently needed for this area.