Marine viruses are the most abundant entity in the ocean but their impact on microbial dynamics and nutrient fluxes remains unresolved. By assessing active viral infection in single cells of the blooming alga Emiliania huxleyi, we revisit its giant virus life cycle showing cells can produce virions without lysing, and lyse without producing virions. Enrichment of infected cells in potential sinking cell aggregates suggests a host defense strategy. We further explore the impact of E. huxleyi blooms on microbial communities and biogeochemical processes during a large-scale experiment. With only 25% of the cells infected in a natural bloom, giant virus infection can modulate the ratio between prokaryotic and eukaryotic recyclers of organic matter. Our results expand marine microbiology's foundational concepts of the microbial loop and viral shunt.