Abstract A process engineering strategy was developed for cultivation of high density biomass of Chlorella sp. FC2 with improved productivity under photoautotrophic condition. The process engineering strategy involved a combinatorial approach of: (i) optimization of CO2 concentration in the inlet gas stream & aeration rate; (ii) growth kinetic driven feeding recipe for limiting nutrients; and (iii) dynamic increase in light intensity. The strategy was tested by growing the cells on laboratory grade BG11 medium. With an attempt to reduce the cultivation cost, the growth performance of the organism was then evaluated on commercial grade BG11 medium. Finally, hydrothermal liquefaction was carried out for direct conversion of microalgal slurry into bio-crude oil. Cultivation on laboratory grade BG11 medium resulted in biomass titer and overall productivity of 8.41 g L−1 and 575.9 mg L−1 day−1 respectively. Significant improvement in biomass titer (13.23 g L−1) and overall productivity (731.6 mg L−1 day−1) was observed when grown on commercial grade BG11 medium. Higher fraction of hydrocarbon in the bio-crude oil depicted better oil quality. Thermal gravimetric analysis revealed that maximum distillate fraction lies within the boiling point range of 200–300 °C which is suitable for conversion into diesel oil, jet fuel, and fuel for stoves.