Reserve lipids of microalgae are promising for biodiesel production. However, economically feasible and sustainable energy production from microalgae requires optimization of cultivation conditions for both biomass yield and lipid production of microalgae. Biomass yield and lipid production in microalgae are a contradictory problem because required conditions for both targets are different. Simultaneously, the mass cultivation of microalgae for biofuel production also depends extremely on the performance of the microalgae strains used. In this study a green unicellular microalgae Chlorella sorokiniana (DS6) isolated from the holding tanks of farm wastewater treatment plant using multi-step screening and acclimation procedures was found high-lipid producing facultative heterotrophic microalgae strain capable of growing on dairy farm effluent (DFE) for biodiesel feedstock and wastewater treatment. Morphological features and the phylogenetic analysis for the 18S rRNA identified the isolated strains. A novel three stage cultivation process of facultative strain of C. sorokiniana was examined for lipid production.