The naked dinoflagellate Karlodinium veneficum is a cosmopolitan and toxic species that frequently forms harmful algal blooms (HABs) in coastal waters. This species has been intensively studied from multiple aspects including toxicology, toxins, nutrition mode (e.g., mixotrophy, phagotrophy, etc.), blooming dynamics, allelopathy, and behavior, while the mechanisms accounting for its global distribution and possible invasion to new regions have not been investigated. Since the first report of a bloom of this species from the South China Sea in 2003, K. veneficum has been frequently detected in coastal waters of China. While resting cyst has been well documented to play vital roles in the initiation and decline of HABs and in facilitating geographical expansion of HABs species, whether or not K. veneficum forms resting cyst remains an open question. Here, we provide proofs for the resting cyst formation in K. veneficum based on both the observations on the life history of clonal cultures and cyst detections from field sediment. We microscopically observed the mating gametes, gametes in fusion, planozygotes (judged from the two longitudinal flagella and cell morphology such as a larger size), dark brown, thick-walled cysts with smooth surface, and cyst germination. The resting cyst was produced homothallically (i.e. from single clonal culture). We also determined the diploidity of cysts via measuring the copy numbers of the large subunit (LSU) rRNA gene in resting cysts and vegetative cells. The presence of K. veneficum cysts in field sediments was detected via fluorescence in situ hybridization (FISH) using species-specific probes, and further confirmed by single-cell PCR sequencing for the FISH-detected cysts. The distribution and abundance of K. veneficum cysts in the China Seas (Bohai Sea, Yellow Sea, East China Sea, and South China Sea) were mapped using a combined approach of real-time PCR and FISH, and quantified after measuring and taking into account the copy numbers of LSU rRNA gene in vegetative cells and cysts. We found a wide distribution of resting cysts of this organism in the seas of China, but generally with a low abundance in most of the samples (0 to 15 cysts per 32 g of wet sediment for FISH method; 0 to 25 cysts per 32 g of wet sediment for qPCR method). The confirmation of resting cyst production from both the laboratory cultures and field sediments and detection of a wide distribution of cysts in the China coasts in this study provide a possible mechanistic explanation for the frequent recurrences of blooms and the cosmopolitan distribution of K. veneficum. Our work also necessitates both a more intensive investigation on the life history (e.g. germination potential of cysts in the field) and an extensive cyst monitoring in coastal sediments, in order to better understand the general ecology and the bloom dynamics specific to this important species.