While current approaches have limitations for efficient and cost-effective microalgal biofuel production, new processes, which are financially economic, environmentally sustainable, and ecologically stable, are needed. Typically, microalgae cells are small and grow individually. Harvest of these cells is technically difficult and it contributes to 20-30% of the total cost of biomass production. A new process of pelletized cell cultivation is described in this study to co-culture a filamentous fungal species with microalgae so that microalgae cells can be co-pelletized into fungal pellets for easier harvest. This new process can be applied to microalgae cultures in both autotrophic and heterotrophic conditions to allow microalgae cells attach to each other. The cell pellets, due to their large size, can be harvested through sieve, much easier than individual cells. This method has the potential to significantly decrease the processing cost for generating microagal biofuel or other products. (C) 2012 Elsevier Ltd. All rights reserved.