The production of toxins by some species of phytoplankton is known to have several economic, ecological, and human health impacts. However, the role of toxins on the spatial distribution of phytoplankton is not well understood. In the present study, the spatial dynamics of a nutrient-phytoplankton system with toxic effect on phytoplankton is investigated. We analyze the linear stability of the system and obtain the condition for Turing instability. In the presence of toxic effect, we find that the distribution of nutrient and phytoplankton becomes inhomogeneous in space and results in different patterns, like stripes, spots, and the mixture of them depending on the toxicity level. We also observe that the distribution of nutrient and phytoplankton shows spatiotemporal oscillation for certain toxicity level.