In recent years, benthic algae have been increasing in abundance in the littoral zones of oligotrophic lakes, but causality has been hard to assign. We used field and laboratory experiments to explore the implications of increasing water temperature and nutrient availability for benthic algal assemblages and ecosystem processes in a Colorado alpine lake. We tested the effect of nutrient enrichment on the relative abundance of algal taxonomic groups in situ using nutrient diffusing substrata. We manipulated temperature and nutrient concentrations in laboratory assays to assess their interactive effects on ecosystem function of chlorophyte-dominated benthic assemblages. Nutrient enrichment with both N and P favored Chlorophyta (green algae) in field experiments and produced the highest overall algal biomass. In the absence of nutrient enrichment, the relative abundance of Bacillariophyta (diatoms) was substantially greater than that of Chlorophyta and cyanobacteria. In laboratory assays, N uptake increased but net ecosystem production decreased with warming temperatures, resulting in reduced N-use efficiency. Even though dissolved organic C (DOC) substantially increased in solution after all laboratory incubations, lower DOC concentrations in the assays with added P and warmer temperatures suggest nutrients and warming stimulated heterotrophic microorganisms as well as primary producers. Our results demonstrate that nutrient availability stimulates Chlorophyta in benthic algal assemblages and that the increase in chlorophytes may alter ecosystem processes with ongoing, rapid environmental change, including N cycling and metabolic functions in oligotrophic lake littoral habitats.