Microalgal biofuels have not yet achieved wide-spread commercialization, partially as a result of the complexities involved with designing and scaling up of their biosystems. The sparger design of a pilot-scale photobioreactor (120 L) was optimized to enable the scale-up of biofuel production. An integrated model coupling computational fluid dynamics and microalgal biofuel synthesis kinetics was used to simulate the biomass growth and novel biofuel production (i.e., bisabolene) in the photobioreactor. Bisabolene production from Chlamydomonas reinhardtii mutant was used as an example to test the proposed model. To select the optimal sparger configuration, a rigorous procedure was followed by examining the effects of sparger design parameters (number and diameter of sparger holes and gas flow rates) on spatially averaged bubble volume fraction, light intensity, friction velocity, power input, biomass concentration, and bisabolene production. The optimized sparger design increases the final biomass concentration by 18%, thereby facilitating the scaling up of biofuel production.