Microcystin-LR (MC-LR) is the most toxic and frequently detected monocyclic heptapeptide hepatotoxin produced by cyanobacteria, which poses a great threat to the natural ecosystem and public health. It is very important to seek environment-friendly and cost-efficient methods to remove MC-LR in water. In this study, the MC-degrading capacities of a novel indigenous bacterial community designated as YFMCD4 and the influence of environmental factors including various temperatures, MC concentrations and pH on the MC-degrading activities were investigated utilizing high-performance liquid chromatography (HPLC). In addition, the MC-degrading mechanism of YFMCD4 was also studied using HPLC coupled with a mass spectrometry equipped with electrospray ionization interface (HPLC-ESI-MS). The data showed MC-LR was completely removed at the maximum rate of 0.5 µg/(mL·h) under the optimal condition by YFMCD4. Two pure bacterial strains Alcaligenes faecalis and Stenotrophomonas acidaminiohila were isolated from YFMCD4 degraded MC-LR at a slower rate. The MC-degrading rates of YFMCD4 were significantly affected by different temperatures, pH and MC-LR concentrations. Two intermediates of a tetrapeptide and Adda appeared in the degradation process. These results illustrate that the novel YFMCD4 is one of the highest effective MC-degrading bacterial community, which can completely remove MC-LR and possesses a significant potential to treat water bodies contaminated by MC-LR.