Two microalgae species (Scenedesmus obliquus and Neochloris oleoabundans) were cultivated in closed sleeve photobioreactors in order to select the best oil producer for further large-scale open raceway pond cultivations, aiming at biofuel production. Scenedesmus obliquus reached a higher maximum biomass concentration (1.41 g l(-1)) with a lower lipid content (12.8% w/w), as compared to N. oleoabundans [maximum biomass concentration of 0.92 g l(-1) with 16.5% (w/w) lipid content]. Both microalgae showed adequate fatty acid composition and iodine values as substitutes for diesel fuel. Based on these results, N. oleoabundans was selected for further open raceway pond cultivations. Under these conditions, N. oleoabundans reached a maximum biomass concentration of 2.8 g l(-1) with 11% (w/w) of lipid content. A high correlation between the Nile Red fluorescence intensity measured by flow cytometry and total lipid content assayed by the traditional gravimetric lipid analysis was found for both microalgae, making this method a suitable and quick technique for the screening of microalgae strains for lipid production and optimization of biofuel production bioprocesses. Medium growth optimization for enhancement of microalgal oil production is now in progress.