Due to increasing oil prices and climate change concerns, biodiesel has gained attention as an alternative energy source. Biodiesel derived from microalgae is a potentially renewable and carbon–neutral alternative to petroleum fuels. Microalgae were isolated in different water bodies and five species were selected based on purity. Chlorella sp. reached high growth rate (0.21 g l-1 dw) when compared to the growth rate of Chematococcus sp. (0.1 g l-1 dw) on 24th day. Rate of CO2 fixation and carbon, in terms of quantity was estimated. Results showed that CO2 fixation was maximum at 0.486 g/dw and carbon biomass was 0.68 g/ml/day in Chlorella sp. Chlorella sp. reached a high lipid content 24.3±0.81% on 24 days of incubation. The fatty acid compositions were analysed by Gas chromatography, Chlorella sp. showed highest amount of oleic acid (16.43 mg g-1 dw). The results suggest that Chlorella sp. can be useful for producing biodiesel.