Background: The necessity to develop high lipid-producing microalgae is emphasized for the commercialization of microalgal biomass, which is environmentally friendly and sustainable. Nannochloropsis are one of the best industrial microalgae and have been widely studied for their lipids, including high-value polyunsaturated fatty acids (PUFAs). Many reports on the genetic and biological engineering of Nannochloropsis to improve their growth and lipid contents have been published. Results: We performed insertional mutagenesis in Nannochloropsis salina, and screened mutants with high lipid contents using fluorescence-activated cell sorting (FACS). We isolated a mutant, Mut68, which showed improved growth and a concomitant increase in lipid contents. Mut68 exhibited 53% faster growth rate and 34% higher fatty acid methyl ester (FAME) contents after incubation for 8 days, resulting in a 75% increase in FAME productivity compared to that in the wild type (WT). By sequencing the whole genome, we identified the disrupted gene in Mut68 that encoded trehalose-6-phosphate (T6P) synthase (TPS). TPS is composed of two domains: TPS domain and T6P phosphatase (TPP) domain, which catalyze the initial formation of T6P and dephosphorylation to trehalose, respectively. Mut68 was disrupted at the TPP domain in the C-terminal half, which was confirmed by metabolic analyses revealing a great reduction in the trehalose content in Mut68. Consistent with the unaffected N-terminal TPS domain, Mut68 showed moderate increase in T6P that is known for regulation of sugar metabolism, growth, and lipid biosynthesis. Interestingly, the metabolic analyses also revealed a significant increase in stress-related amino acids, including proline and glutamine, which may further contribute to the Mut68 phenotypes. Conclusion: We have successfully isolated an insertional mutant showing improved growth and lipid production. Moreover, we identified the disrupted gene encoding TPS. Consistent with the disrupted TPP domain, metabolic analyses revealed a moderate increase in T6P and greatly reduced trehalose. Herein, we provide an excellent proof of concept that the selection of insertional mutations via FACS can be employed for the isolation of mutants with improved growth and lipid production. In addition, trehalose and genes encoding TPS will provide novel targets for chemical and genetic engineering, in other microalgae and organisms as well as Nannochloropsis.