Phytoplankton is confronted with a variable assemblage of zooplankton grazers that create a strong selection pressure for traits that reduce mortality. Phytoplankton is, however, also challenged to remain suspended and to acquire sufficient resources for growth. Consequently, phytoplanktic organisms have evolved a variety of strategies to survive in a variable environment. An overview is presented of the various phytoplankton defense strategies, and costs and benefits of phytoplankton defenses with a zooming in on grazer-induced colony formation. The trade-off between phytoplankton competitive abilities and defenses against grazing favor adaptive trait changes—rapid evolution and phenotypic plasticity—that have the potential to influence population and community dynamics, as exemplified by controlled chemostat experiments. An interspecific defense–growth trade-off could explain seasonal shifts in the species composition of an in situ phytoplankton community yielding defense and growth rate as key traits of the phytoplankton. The importance of grazing and protection against grazing in shaping the phytoplankton community structure should not be underestimated. The trade-offs between nutrient acquisition, remaining suspended, and grazing resistance generate the dynamic phytoplankton community composition.