The study explores on upstream and downstream process in Microcystis aeruginosa for biodiesel production. The alga was isolated from temple tank, acclimatized and successfully mass cultivated in open race-way pond at semi-continuous mode. A two step combined process was designed and harvested 99.3% of biomass, the daily dry biomass productivity was recorded up to 28 g m(-2) day(-1). The lipid extraction was optimized and achieved 21.3%; physicochemical properties were characterized and found 11.7% of FFA, iodine value 72% and 99.2% of ester content. The lipid was transesterified by a two step simultaneous process and produced 90.1% of biodiesel; the calorific value of the biodiesel was 38.8 MJ/kg. Further, the physicochemical properties of biodiesel was characterized and found to be within the limits of American ASTM D6751. Based on the areal and volumetric biomass productivity estimation, M. aeruginosa can yield 84.1 tons of dry biomass ha(-1) year(-1). (C) 2014 Elsevier Ltd. All rights reserved.