Developing alternative fuels is an essential step towards solving fossil fuels issues such as fuel cost and pollution. Microalgae can be a promising feedstock for alternative fuel as it is fast growing and easily cultivated. Exploring wastewater such as palm oil mill effluent (POME) for feasible microalgae cultivation is essential as POME is abundantly available from palm oil milling activities. The high content of nutrients in POME makes it a potential microalgae growth medium. This study demonstrated that a microalgae species, i.e. Chlorella vulgaris UMACC 001 can grow at a specific growth rate of 0.39 day-1 and produce 0.14 mg biomass litre day-1 in POME outdoor conditions. The extracted algal oil showed 48.9% saturated fatty acids and 51.1% unsaturated fatty acids equivalent to palm oil as a biodiesel feedstock.