In the present study, the use of immobilization technology to cultivate microalgae in entrapped matrix gel beads was demonstrated. Since the gel beads are denser in water, the beads can be easily collected through simple filtration method and hence, simplifying the overall separation process. Various parameters were investigated to optimize the growth rate of immobilized microalgae and the optimum conditions were obtained as: alginate to microalgae volume ratio of 0.3, Ca2+ concentration of 2%, organic nutrients concentration of 50 mL (equivalent to 13.09 mg/L nitrate), initial culture pH of 4 and photoperiod of 24 h. Using this optimum culture condition, 0.50 mg biomass/bead was attained on the 10th clay of cultivation. Apart from that, this study also attempted to co-immobilize nutrients into microalgae beads in order to minimize free cell culture (microalgae cells that are released into the culture medium due to rupturing of beads) and to reduce water consumption. Through this approach, it was found that microalgae biomass yield increased to 0.67 mg/bead within a shorter culturing time (5 days) with insignificant amount of free cell culture detected. Furthermore, lipid extracted from immobilized microalgae biomass has high potential for biodiesel production clue to the similarity of fatty acid profile with other oil bearing crops. (c) 2012 Elsevier B.V. All rights reserved.