Photobioreactors are a novel environmental technology that can produce biofuels with the simultaneous removal of nutrients and pollutants from wastewaters. The aim of this study was to evaluate the effect of lake water inoculation on the production of algal biomass and phylogenetic and functional structure of the algal and bacterial communities in municipal wastewater-treating lab-scale photobioreactors. Inoculating the reactors with lake water had a significant benefit to the overall algal biomass growth and nutrient reduction in the reactors with wastewater and lake water (ratio 70/30 v/v). The metagenome-based survey showed that the most abundant algal phylum in these reactors was Chlorophyta with Scenedesmus being the most prominent genus. The most abundant bacterial phyla were Proteobacteria and Bacteroidetes with most dominant families being Sphingobacteriaceae, Cytophagaceae, Flavobacteriaceae, Comamonadaceae, Planctomycetaceae, Nocardiaceae and Nostocaceae. These photobioreactors were also effective in reducing the overall amount of pathogens in wastewater compared to reactors with wastewater/tap water mixture. Functional analysis of the photobioreactor metagenomes revealed an increase in relative abundance genes related to photosynthesis, synthesis of vitamins important for auxotrophic algae and decrease in virulence and nitrogen metabolism subsystems in lake water reactors. The results of the study indicate that adding lake water to the wastewater-based photobioreactor leads to an altered bacterial community phylogenetic and functional structure that could be linked to higher algal biomass production, as well as to enhanced nutrient and pathogen reduction in these reactors.