As a primary factor responsible for lake eutrophication, a deeper understanding of the phosphorus (P) composition and its turnover in sediment is urgently needed. In this study, P species in surface sediments from a Chinese large eutrophic lake (Lake Taihu) were characterized by traditional fractionation and P-31 nuclear magnetic resonance (NMR) spectroscopy, and their contributions to the overlying water were also discussed. Fractionation results show that NaOH-P predominated in the algal-dominated zone, accounting for 60.1% to total P in Zhushan Bay. Whereas, refractory fractions including HCl-P and residual-P were the main P burial phases in the macrophyte-dominated zone, the center and lakeshore. Recovery rates of the total P and organic P were greatly improved by using a modified single-step extraction of NaOH-EDTA, ranging from 22.6 to 66.1% and from 15.0 to 54.0%. Ortho-P, monoester-P, and pyro-P are identified as the major P components in the NaOH-EDTA extracts by P-31 NMR analysis. Trace amount of DNA-P appeared only in sediments from algal- and macrophyte-dominated zones, ascribing to its biological origin. The relative content of ortho-P is the highest in the algal-dominated zone, while the biogenic P including ester-P and pyro-P is the highest in the macrophyte-dominated zone. Moreover, ortho-P and pyro-P correlated positively with TP and chlorophyll a in the overlying water, whereas only significant relationships were found between monoester-P, biogenic P, and chlorophyll a. These discrepancies imply that inorganic P, mainly ortho-P, plays a vital role in sustaining the trophic level of water body and algal bloom, while biogenic P makes a minor contribution to phytoplankton growth. This conclusion was supported by the results of high proportion of biogenic P in algae, aquatic macrophytes, and suspended particulate from the published literature. This study has significant implication for better understanding of the biogeochemical cycling of endogenous P and its role in affecting lake eutrophication.