South Africa has a rich microalgal biodiversity which has the potential to be used for renewable bio-fuel production in the region. Bioprospecting for oleaginous microalgae in KwaZulu Natal Province, South Africa, resulted in the establishment of a microalgal culture collection system for alternative energy research in the country. A potential hyper-lipid-producing Chlorella spp. strain was isolated, purified, and cultured in supplemented post-chlorinated wastewater for biomass and lipid production at the laboratory scale under batch mode. The microalgal strain was cultivated in different strengths of BG-11 media supplemented with wastewater from a local municipal domestic wastewater treatment plant. The Chlorella spp. was grown using ambient dissolved carbon dioxide in shake flasks under photosynthetically active radiation (+/- 120 mu molm(-2)s(-1)). Microalgal biomass and lipid productivity were monitored at 24-h intervals in the batch mode. The microalgal biomass was analyzed by direct light microscopy and indirectly by spectrophotometry at 600 nm, and the lipids were extracted and quantified. The growth rate of the Chlorella spp. was enhanced in post-chlorinated wastewater supplemented with 5 mM NaNO3 with maximal biomass productivity. A dramatic increase in lipid yield was achieved with the post-chlorinated wastewater supplemented with 25 mM NaNO3. Low dosages of free chlorine were found to enhance microalgal growth. These findings serve as a basis for further scale-up trials using municipal wastewater as a medium for microalgal biomass and lipid production.