Arsenic is a known environmental toxicant and it occurs in the environment from natural and anthropogenic sources. Arsenic is one of the important environmental issues because of its occurrence, bioaccumulation, toxicity, and trophic transfer in the freshwater food chain. Aquatic organisms accumulate, retain, and transform arsenic when exposed to it through water, their diet, and other routes. Since arsenic toxicity mostly depends on its chemical forms, measurement of arsenic speciation in aquatic organisms is particularly important in assessing the ecological risks of the element. Arsenate (As(V)) comprises the major part of total arsenic in oxic waters. Phytoplankton take up As(V) and subsequently convert it to arsenite (As(III)) and then to less toxic dimethylarsinic acid (DMAA), monomethylarsonic acid (MMAA), and higher order organoarsenicals. Phytoplankton are thought to convert inorganic arsenic species to methylarsenicals and to other organoarsenic compounds (lipids and arsenosugars) to reduce the toxic effects of inorganic arsenicals. Since phytoplankton are a major food source for the organisms of higher trophic levels in the aquatic systems, arsenic is biotransferred from lower to higher trophic levels; while biomagnification of the element in aquatic food chain is not consistent. Other important arsenic forms found in aquatic organisms include arsenocholine (AsC), arsenobetaine (AsB) and arsenosugars (AsS). This review discusses the bioaccumulation, biotransformation, and trophic transfer (biomagnification or diminution) of arsenic in the aquatic food chains in relation to its ecotoxicological risks in the freshwater environment.