The relationship between biodiversity and ecosystem functioning is a central issue in ecology. The insurance hypothesis suggests that biodiversity could improve community productivity and reduce the temporal variability of main ecosystem processes. In the present study, we used a plankton community that was investigated from 2011 to 2014 in Lake Nansihu to test this hypothesis and explore the mechanisms involved. As a result, 138 phytoplankton and 76 zooplankton species were identified in the lake, and their biomasses showed apparent seasonal variations. The average temporal stability index of zooplankton taxa was significantly higher than that of phytoplankton. Complex relationships were observed between the species richness and temporal stability of different phytoplankton taxa: a unimodal relationship for both Cyanophyta and Bacillariophyta; a strong concave relationship for Euglenophyta; and no apparent relationship for both Chlorophyta and total phytoplankton. These relationships were primarily controlled by the portfolio effect; while the effects of overyielding and species asynchrony were relatively weak. Phytoplankton species richness had a significant positive influence on the temporal stability indices of protozoa, Rotifera and total zooplankton, while its influence on Cladocera and copepods was not significant. The dominant mechanisms were found to be ‘trophic overyielding’ and a weak ‘trophic portfolio effect’; however, ‘trophic species asynchrony’ played a minor role. These results demonstrated that the effects of diversity on community stability can be complex in natural ecosystems. In addition, the diversity of phytoplankton not only influenced its own temporal stability, but also affected the stability of zooplankton through trophic interactions.