Influence of salinity as a stress factor to harness biodiesel was assessed during dual mode cultivation of microalgae by integrating biomass growth phase (BGP) and salinity induced lipid induction phase (LIP). BGP was evaluated in mixotrophic mode employing nutrients (NPK) and carbon (glucose) source while LIP was operated under stress environment with varying salt concentrations (0, 0.5, 1 and 2 g NaCl/l). Salinity stress triggered both biomass growth and lipid synthesis in microalgae significantly. BGP showed higher increments in biomass growth (2.55 g/l) while LIP showed higher lipid productivity (1 g NaCl/l; total/neutral lipid, 23.4/9.2%) than BGP (total/neutral lipid, 15.2/6%). Lower concentrations of salinity showed positive influence on the process while higher concentrations showed marked inhibition. Salinity stress also facilitated in maintaining saturated fatty acid methyl esters in higher amounts which associates with the improved fuel properties. Efficient wastewater treatment was observed during BGP operation indicating the assimilation of carbon/nutrients by microalgae. (C) 2014 Elsevier Ltd. All rights reserved.