A novel integrated approach has been proposed to convert lipid-rich, dry algae (Nannochloropsis sauna) into fatty acid ethyl esters (FAEE) under microwave-mediated supercritical ethanol (MW-SCE) conditions with a non-catalytic transesterification approach. This process enables simultaneous extraction of lipids from algal biomass and conversion/transesterification of them into algal biodiesel in a relatively short reaction time, which may reduce energy consumption versus traditional processes due to simplified separation and purification steps. High conversion rates can be possible when the extractive-transesterification of algal biomass is performed near-critical or supercritical conditions. The use of passive heating elements made of silicon carbide (SiC) to aid the microwave-mediated heating process at higher temperatures is also described. Experimental runs were designed to optimize the process parameters to evaluate the effect on the algal biodiesel under controlled power conditions. The algal biomass characterization and algal biodiesel analysis were performed using various analytical instruments such as FTIR, SEM-EDS, TGA and GC MS. It was demonstrated in this work that this direct conversion technique has the potential to provide an energy-efficient and economical route for algal biodiesel production. (C) 2012 Elsevier B.V. All rights reserved.