A new in-situ transesterification method was developed for wet biomass: K2CO3 was used as an alkaline catalyst and, Aurantiochytrium sp. KRS 101 as oleaginous DHA-producing microalgae. It was found that the presence of water greatly impaired the overall efficiency even with the powerful catalyst that had worked surpassingly well with dry biomass, and thus a mechanical aid like ultrasonication was needed to make advantage of full potential of the alkaline catalyst. The total fatty acid ethyl ester (FAEE) recovery yield of 94.6% was achieved with sonication at 100 g/L of biomass (40% moisture), 3% of K2CO3, 70 degrees C and 30 min. All these suggest that the ultrasound assisted in-situ transesterification can offer a feasible means for FAEE recovery and it was so by way of overcoming the physical limitation of mass transfer caused the presence of water and providing effective contacts between reactants.