A combined pretreatment, fermentation and ethanol-assisted liquefaction process was studied to produce biofuels and chemicals from marine microalga Nannochloropsis sp. We (similar to 80% moisture) and dry microalgal biomass were initially pretreated with dilute acid (3% H2SO4) and subsequently fermented with yeast Saccharomyces cerevisiae. By pretreatment and fermentation, about 10% of required ethanol in liquefaction was produced and the lipid content of fermented microalgal biomass was increased by 40%. Following fermentation, liquefaction assisted with 15% (v/v) ethanol (2:1 ethanol to algae ratio) at 265 degrees C converted fermented microalgae to crude biodiesel, aqueous products and solid residues. This combined algae to liquid process could increase the crude biodiesel yield by three-fold compared to liquefaction of microalgae. The main advantage of the process is the utilization of wet algae in essential ethanol production within the process to enhance the crude biodiesel production by ethanol-assisted liquefaction.