Algal biorefinery-based integrated industrial sector is getting increased attention in United States as a sustainable way of producing biofuel, high value products and feed ingredients. However, coproduct market analysis and water footprint (WFP) of algal biorefineries need to be studied before large scale deployment and adoption of this strategy. This article highlights the coproduct market and WFP analysis of two simulated algal biorefineries. The market analysis of primary product (biodiesel) and coproducts (algal meal (AM), omega-3 fatty acids (O3FA), glycerin) from these biorefineries showed that there is clear market for AM and O3FA up to certain level, there after diversification for other coproducts is desirable. Challenges include, vigorously finding new market and sectors to integrate the products and coproducts. Hence, comprehensive assessment of coproduct market and coproduct diversification among the biorefinery to meet the local needs and to avoid market glut by excessive production of single coproduct is needed. Our analysis also showed the clear advantages for multiproduct paradigm to attain high operational profit and to sustain initial industry developmental phase with clear return on investment. Our WFP analysis showed that algal biodiesel production requires 23-62 L MJ(-1) of energy produced and our calculations showed that the energy return on water invested (EROWI) for algal biodiesel at different scenarios ranged between 0.042 and 0.016 MJ. Coproducts market analysis and WFP of algal biorefineries with different production scenarios illustrated the new policy and regulatory needs for the sustainable development of an algal biofuel sector to meet liquid fuel needs. (C) 2010 Elsevier Ltd. All rights reserved.