With world crude oil reserves decreasing and energy prices continually increasing, interest in developing renewable alternatives to petroleum-based liquid fuels has increased. An alternative that has received consideration is the growth and harvest of microalgae for the production of biodiesel via extraction of the microalgal oil or lipids. However, costs related to the growth, harvesting and dewatering, and processing of algal biomass have limited commercial scale production of algal biodiesel. Coupling wastewater remediation to microalgal growth can lower costs associated with large scale growth of microalgae. Microalgae are capable of assimilating inorganic nitrogen and phosphorous from wastewater into the biomass. By harvesting the microalgal biomass these nutrients can be removed, thus remediating the wastewater. Standard methods of oil extraction require drying the harvested biomass, adding significant energetic cost to processing the algal biomass. Extracting algal lipids from wet microalgal biomass using traditional methods leads to drastic reductions in extraction efficiency, driving up processing costs. A wet lipid extraction procedure was developed that was capable of extracting 79% of the transesterifiable lipids from wet algal biomass (16% solids) without the use of organic solvents while using relatively mild conditions (90 °C and ambient pressures). Ultimately 77% of the extracted lipids were collected for biodiesel production. Furthermore, the procedure was capable of precipitating chlorophyll, allowing for the collection of algal lipids independently of chlorophyll. The capability of this procedure to extract lipids from wet algal biomass, to reduce chlorophyll contamination of the algal oil, and to generate feedstock material for the production of additional bio-products provides the basis for reducing scale-up costs associated with the production of algal biofuels and bioproducts.