In order to reduce the cost of the production of microalgae for biodiesel, the feasibility of using the mixture of seawater and municipal wastewater as culture medium and CO2 from flue gas for the cultivation of marine microalgae was investigated in this study. Effects of different ratios of municipal wastewater and 15% CO2 aeration on the growth of Nannochloropsis sp. were examined, and lipid accumulation of microalgae was also studied under nitrogen starvation and high light. It was found that optimal growth of microalgae occurred in 50% municipal wastewater, and the growth was further significantly enhanced by aeration with 15% CO2. When Nannochloropsis sp. cells were transferred from the first growth phase to the second lipid accumulation phase under the combination of nitrogen deprivation and high light, both biomass and lipid production of Nannochloropsis sp. were significantly increased. After 12 clays of the second-phase cultivation, the biomass concentration and total lipid content increased from 0.71 to 2.23 g L-1 and 33.8-59.9%, respectively. This study suggests that it is possible to utilize municipal wastewater to replace nutrients in seawater medium and use flue gas to provide CO2 in the cultivation of oil-bearing marine microalgae for biodiesel. Crown Copyright (C) 2011 Published by Elsevier Ltd. All rights reserved.