Production of Biofuels from algae is a promising technology which is alternative to conventional fossil fuels. Especially microalgae represent highly specialised group of micro organisms which are efficient in producing biomass and lipid through photosynthesis which can be used instead of petroleum, coal and natural gas. The present work aimed at the selection of an efficient microalgae for the production of renewable bio-fuels, sourcing out solvent for extraction, to investigate suitable parameters for production of lipids . Among the isolates of microalgae, Chlorella sp. MA-6 is promising in production of lipid and also in biodiesel yield as compared to Chlorella MA -1 and Chlorella MA-3. Under nitrogen limiting conditions, sodium nitrate at 1mM concentration could yield increased lipid content while it was decreased at low as well as high concentration. Among the solvents tested, hexane performed better than combination of Cyclohexane/Butanol in terms of yield in targeted glycerides. The isolate Chlorella MA6 was suitable for production of biodiesel as renewable energy source.