Harmful algae bloom caused by water eutrophication is a burning question worldwide. Allelochemicals sustained-release microspheres (ACs-SMs) exhibited remarkable inhibition effect on algae, however, few studies have focused on the ecotoxic side-effects of ACs-SMs on submerged plant and its associated microfloras. Herein the effects of different exposure situations including single high-concentration ACs (15 mg/L, SH-ACs), repeated low-concentration ACs (3 × 5 mg/L, RL-ACs) and ACs-SMs containing 15 mg/L ACs on morphological indexes, chlorophyll content, lipid peroxidation, enzymatic activity, and chlorophyll fluorescence indexes of submerged plant Vallisneria natans and the richness and diversity of its associated microfloras (epibiotic microbes and sediment microbes) were studied. The results showed that pure ACs (RL-ACs and SH-ACs groups) had negative effects on plant height, mean leaf number and area of V. natans, but promoted the increase of mean leaf length. In addition, pure ACs caused lipid peroxidation, activated the antioxidant defense system, decreased chlorophyll content, and damaged photosynthetic system in leaves. Interestingly, ACs-SMs not only had barely negative effects on above indexes of V. natans, but had certain positive effects at the later experiment stage (days 50–60). Pure ACs and ACs-SMs all reduced the richness and diversity of microfloras in each group, and promoted the increase of relative abundance of dominant bacteria Pseudomonas, leading to a simpler community structure. Significantly, V. natans leaves diminished the effects of pure ACs and ACs-SMs on epibiotic microbes, and the plant rhizosphere was beneficial to the increase of dominant bacteria that promoted plant growth. Thus, sustained-release microspherification technology can effectively relieve the ecotoxic side-effects of pure ACs on submerged plant and its associated microfloras. This study fills the gap on the ecological safety knowledge of ACs-SMs and provides primary data for evaluating the feasibility and commercialization prospects of ACs-SMs as algae inhibitor in aquatic ecosystem.