Abstract Energy demand is increasing continuously due to the progress of industrialization, the vehicular population of the world, and modernization in lifestyle. In the present study, Chlorella minutissima microalgae were cultured in a 1500 L raceway open pond using commercial fertilizer under semi-continuous mode. About 19.98 wt % lipid was extracted by the soxhlet extraction method from this microalgae biomass. To optimize the input reaction parameters (temperature, lipid to methanol ratio, microwave power, and reaction time) for improving transesterification yield, Response Surface Methodology (RSM) was employed. The output responses of the experiments were biodiesel yield along with density, kinematic viscosity, calorific value, cold flow properties, and oxidation stability. To validate the model, confirmation trials were carried out. All the fuel properties were found to be satisfying ASTM D6751 and EN 14214 standard specifications except for oxidation stability at 3.0 h. The oxidation stability was further improved by using appropriate antioxidants and improved up to 10.5 h with the addition of 1000 ppm propyl gallate.