This work focuses on the production of biodiesel from wet, lipid-rich algal biomass using a two-step process involving hydrothermal carbonization (HTC) and supercritical in situ transesterification (SC-IST). Algal hydrochars produced by HTC were reacted in supercritical ethanol to determine the effects of reaction temperature, time, ethanol loading, water content, and pressure on the yield of fatty acid ethyl esters (FAEE). Reaction temperatures above 275 degrees C resulted in substantial thermal decomposition of unsaturated FAEE, thereby reducing yields. At 275 degrees C, time and ethanol loading had a positive impact on FAEE yield while increasing reaction water content and pressure reduced yields. FAEE yields as high as 79% with a 5:1 ethanol:fatty acid (EtOH:FA) molar ratio (150 min) and 89% with a 20:1 EtOH:FA molar ratio (180 min) were achieved. This work demonstrates that nearly all lipids within algal hydrochars can be converted into biodiesel through SC-IST with only a small excess of alcohol. (C) 2013 Elsevier Ltd. All rights reserved.