This study demonstrated a one-step process for direct liquefaction and conversion of wet algal biomass containing about 90% of water to biodiesel under supercritical methanol conditions. This one-step process enables simultaneous extraction and transesterification of wet algal biomass. The process conditions are milder than those required for pyrolysis and prevent the formation of by-products. In the proposed process, fatty acid methyl esters (FAMEs) can be produced from polar phospholipids, free fatty acids, and triglycerides. A response surface methodology (RSM) was used to analyze the influence of the three process variables, namely, the wet algae to methanol (wt./vol.) ratio, the reaction temperature, and the reaction time, on the FAMEs conversion. Algal biodiesel samples were analyzed by ATR-FTIR and GC-MS. Based on the experimental analysis and RSM study, optimal conditions for this process are reported as: wet algae to methanol (wt./vol.) ratio of around 1:9, reaction temperature and time of about 255 degrees C, and 25 min respectively. This single-step process can potentially be an energy efficient and economical route for algal biodiesel production. (C) 2010 Elsevier Ltd. All rights reserved.