As energy and environment have become urgent issues, there has been increasing needs to develop alternative energy source, such as microalgal bio-fuel. In this study, we investigated the growth and lipid contents of microalgae Nannochloris oculata under various environmental conditions for biodiesel production. Our results indicated that biomass productivities of N. oculata were correlated with increasing nitrogen concentrations up to 37.5 ppm. High irradiance using 230-250 mu mol/m(2) led to higher biomass yields than low irradiance of 160-180 mu mol/m(2). Biomass productivities increased further by manipulating surface to volume ratio (S/V), which in turn enhanced light penetration. Finally, optimal biomass productivities (1.04 g/l day) could be achieved by the supplementation of yeast extract. Lipid contents and fatty acid profiles of N. oculata were affected by the different growth conditions. Lipid contents of N. oculata decreased as nitrogen concentration increased. Lower temperature (15 A degrees C) resulted in higher lipid content than higher temperature (25 A degrees C). Fatty acid profiles of N. oculata indicated that palmitic acid (C16:0) and linoleic acid (C18:2) were the two most abundant fatty acids, but the supplementation of yeast extract increased linolenic acid (C18:3) content. Our results suggested the feasibility of N. oculata for the biodiesel production.