There is increasing interdisciplinary interest in phytoplankton community dynamics as the growing environmental problems of water quality (particularly eutrophication) and climate change demand attention. This has led to a pressing need for improved biophysical and causal understanding of Phytoplankton Functional Type (PFT) optical signals, in order that satellite radiometry may be used to detect ecologically relevant phytoplankton assemblage changes. This understanding can best be achieved with biophysically and biogeochemically consistent phytoplankton Inherent Optical Property (IOP) models, as it is only via modelling that phytoplankton assemblage characteristics can be examined systematically in relation to the bulk optical waterleaving signal. The Equivalent Algal Populations (EAP) model is used here to investigate the source and magnitude of size- and pigment- driven PFT signals in the water-leaving reflectance, as well as the potential to detect these using satellite radiometry. This model places emphasis on explicit biophysical modelling of the phytoplankton population as a holistic determinant of IOPs, and a distinctive attribute is its comprehensive handling of the spectral and angular character of phytoplankton scattering. Selected case studies and sensitivity analyses reveal that phytoplankton spectral scattering is the primary driver of the PFT-related signal. Key findings are that the backscattering-driven signal in the 520 to 600 nm region is the critical PFT identifier at marginal biomass, and that while PFT information does appear at blue and red wavelengths, it is compromised by biomass/gelbstoff ambiguity in the blue and low signal in the red, due primarily to absorption by water. These findings are hoped to provide considerable insight into the next generation of PFT algorithms.