With the increase of algal blooms worldwide, drinking water resources are threatened by the release of various algal toxins, which can be hepatotoxic, cytotoxic, or neurotoxic. Because of their ubiquitous occurrence in global waters and incomplete removal in conventional drinking water treatment, oxidation/disinfection processes have become promising alternative treatment options to destroy both the structures and toxicity of algal toxins. This Review first summarizes the occurrence and regulation of algal toxins in source water and drinking water. Then, the transformation kinetics, disinfection byproducts (DBPs)/transformation products (TPs), pathways, and toxicity of algal toxins in water oxidation/disinfection processes, including treatment by ozonation, chlorination, chloramination, ultraviolet-based advanced oxidation process, and permanganate, are reviewed. For most algal toxins, hydroxyl radicals (HO•) exhibit the highest oxidation rate, followed by ozone and free chlorine. Under practical applications, ozone and chlorine can degrade most algal toxins to meet water quality standards. However, the transformation of the parent structures of algal toxins by oxidation/disinfection processes does not guarantee a reduction in toxicity, and the formation of toxic TPs should also be considered, especially during chlorination. Notably, the toxicity variation of algal toxins is associated with the chemical moiety responsible for toxicity (e.g., Adda moiety in microcystin-LR and uracil moiety in cylindrospermopsin). Moreover, the formation of known halogenated DBPs after chlorination indicates that toxicity in drinking water may shift from toxicity contributed by algal toxins to toxicity contributed by DBPs. To achieve the simultaneous toxicity reduction of algal toxins and their TPs, optimized oxidation/disinfection processes are warranted in future research, not only for meeting water quality standards but also for effective reduction of toxicity of algal toxins.