Nutrient export from soil erosion during rainfall events is an important non-point source of nutrients to waterways, causing water quality degradation. The type of soil eroded is likely to affect ecosystem responses in receiving waters, but this has been poorly studied. Therefore, we utilized novel bioassays to compare the photosynthetic response of a freshwater green algal species (Monoraphidium spp.) and a marine green algal species (Nannochloropsis spp.) to ten sources of suspended sediments generated from different soil types standardized to have similar total suspended solid (TSS) concentrations. Dissolved nitrogen was the single nutrient parameter that most highly correlated with the algal photosynthetic yield responses to the suspended sediment addition (adjusted R2 = 0.58 and 0.53, respectively, for Monoraphidium spp. and Nannochloropsis spp.). Our study showed that different sediment sources, with similar TSS concentrations, caused different responses across the algal species. Compared to Monoraphidium, the marine algal species Nannochloropsis had a higher photosynthetic yield response to certain suspended sediment samples, where the proportion of potassium sulfate extractable ammonium was significantly higher than the other suspended sediment samples. This indicates the increased desorption of ammonium from fine soil particles in response to the shift to marine waters contributed to the higher response of Nannochloropsis. These results highlight the importance of considering both different soil types (where soil erosion occurs) and the type of receiving environments (where the catchment runoff delivers to) when assessing catchment runoff impacts on waters.