The scaling up and downstream processing costs of biodiesel from microalgae are major concerns. This study focuses on developing a new method by integrating ozone-rich microbubbles in both the production of microalgae and in downstream processes such as biomass harvesting and lipid extraction. A bacterial contaminant of a green algal (Dunaliella salina) culture was successfully screened, isolated and identified using 16S rRNA gene sequencing as a member of the Halomonas genus (gram-negative). Ozonation of mixed cultures of D. salina and Halomonas for 10 minutes at 8 mg/L reduced the bacterial contaminant without harming the microalgal cells. The sterilisation efficiency reached 66% after 5 minutes and increased to 93% after 10 minutes of ozonation. The algal cell growth performance (biomass concentration) was decreased by over 50% at 10% (v/v) contaminant concentration. Ozonation for 10 minutes at the beginning of the experiment resulted in a biomass reduction of 28.6%, which suggests that ozonation at the beginning of experiment can control the contamination. The optimum values for three parameters (culture media volume, ozone concentration and ozonation time) suggested by the statistical software were 30.63 mL, 8.20 mg/L and 37.7 min, respectively. Harvesting of D. salina cells through microflotation resulted in a 93.4% recovery efficiency. Ozonation of the harvested microalgae for 40 minutes produced three main saturated compounds [2-pentadecanone 6, 10, 14-trimethyl; n-hexadecanoic acid (palmitic acid); and octadecanoic acid (stearic acid)] that consist of 16 to 18 carbons. The main products increased significantly around 156%, 88.9% and 150% for 2-pentadecanone, 6, 10, 14-trimethyl; palmitic acid and stearic acid, respectively when the temperature was increased (60 ˚C), and smaller bubbles (generated by a fluidic oscillator) were introduced during the extraction process. By integrating microbubbles and ozonation into an airlift-loop bioreactor-processing system, this thesis describes a microbubble photobioreactor that delivers in-situ disinfection with microflotation harvesting and lipid extraction in an easily scalable and energy-efficient process.