A method is provided to produce biodiesel from algae using a two-stage, autotrophic and heterotrophic cultivations of chlorella for biodiesel production. This method includes a sequence of procedures: cultivating photoautotrophic algae, concentrating cells and then transferring them to a fermentor for heterotrophic cultivation. During the photoautotrophic cultivation stage, the culture is exposed to a light source, such as sunlight with carbon dioxide obtained from a carbon dioxide source or from air. antibacterial agents may be added to prevent contamination from undesired microorganisms. Organic carbons are added during heterotrophic cultivation stage. Fermentation conditions are optimized for maximizing lipid synthesis. High biomass is achieved to about 108 g/L with lipid content reaching about 52% of dry cell weight. After cultivation, biodiesel is made through extraction and transesterification of algae lipids.