An in situ transesterification approach was demonstrated for converting lipid-rich wet algae (Nannochloropsis sauna) into fatty acid ethyl esters (FAEE) under microwave-mediated supercritical ethanol conditions, while preserving the nutrients and other valuable components in the algae. This single-step process can simultaneously and effectively extract the lipids from wet algae and transesterify them into crude biodiesel. Experimental runs were designed to optimize the process parameters and to evaluate their effects on algal biodiesel yield. The algal biomass characterization and algal biodiesel analysis were carried out by using various analytical instruments such as FTIR, SEM-EDS, TLC, GC-MS and transmission electron microscopy (TEM). The thermogravimetric analysis (TGA) under nitrogen and oxygen environments was also performed to examine the thermal and oxidative stability of ethyl esters produced from wet algae. This simple in situ transesterification process using a green solvent and catalyst-free approach can be a potentially efficient route for algal biodiesel production. (C) 2013 Elsevier Ltd. All rights reserved.