Malachite green is a carcinogenic dye that has been detected in fish tissues and freshwater. Here we evaluated the malachite green decoloring ability of a photoautotrophic cyanobacterium, Synechococcus elongatus PCC 7942 (Synechococcus), that lives in freshwater. Results show that 99.5% of the dye was removed by Synechococcus through bioabsorption and bioaccumulation; however, the dye was not degraded or chemically modified. Next, we established an engineered Synechococcus strain to degrade the dye after uptake. The triphenylmethane reductase gene katmr was heterologously expressed, resulting in high production of a soluble recombinant protein. The engineered strain showed advanced decoloring abilities at a low cell density and in stressful environments. It degraded malachite green into the smaller molecules 4-methylaminobenzoic acid and 4-hydroxyl-aniline. After treatment with the engineered cyanobacterium, the growth of wheat seeds was fully recovered in the presence of malachite green. These results demonstrate the potential application of the engineered Synechococcus as a photosynthetic cell factory for the removal of malachite green from wastewater.