Microalgae has shown to be an ideal choice for biofuel industry. Algae has high oil productivity, a short growth cycle and survives in a wide variety of water sources including high salinity and waste water. For this project, four different species of marine microalgae were screened based on oil content. They were Dunaliella tertiolecta (CCMP364), Nannochloropsis gaditana (CCMP527), Tetraselmis sp (CCMP 908) and Nannochloropsis salina (CCMP1776). Experimental results showed that CCMP 527 and 1776 strains had higher lipid content and better fatty acids profile than the other two. Further investigations were carried on CCMP 527 in order to maximize biomass productivity and lipid content. Nutrients, salinity, pH, temperature, light intensity and aging of the culture can all affect both lipid content and fatty acid profile and were investigated. Nutrient stress is the easiest way to manipulate lipid composition and increase lipid content. Hence, various carbon and nitrogen sources were investigated to determine the range and amount of substrates that may be feasible for cultivation. For supplying lipid for biodiesel production, the optimum culture conditions for strain Nannochloropsis gaditana are using CO₂ enriched air bubbling, f/2-Si medium, pH control, and nitrate as the nitrogen source. Use of other fertilizers is feasible as well, however, the nitrogen source greatly affects lipid productivity, but trace amounts of organics in ground water do not.A model which predicts cell growth, nitrogen concentration, and lipid yield in batch systems is developed that is applicable for low nitrogen conditions. Plus, a sensitivity analysis of three major parameters was done to validate how variations in these key parameters affect simulation results. The fatty acid profile as a function of time was shown not to vary from mid-exponential to stationary phase. The model describes reactor behavior well, therefore it can be applied to the genus of Nannochloropsis to predict biomass yield and lipid accumulation, and be a useful tool to optimize and compare bioreactor systems for the biofuel industry. In addition, effects of nitrate and urea under repletion condition on microalgae growth, lipid yield and fatty acids profile for microalgae Nannochloropsis gaditana were investigated. Replacing nitrate by urea didn't show positive influence on lipid content and yield compared to normal medium. The major fatty acids for these two mediums were palmitic acid (C16:0) and palmitioleic acid (C16:1). Nannochloropsis gaditana still shows to be ideal candidate for biodiesel production using urea or nitrate enriched agriculture wastewater.