This study examined the sustainability of generating renewable diesel via hydrothermal liquefaction (HTL) of biomass from a rotating algal biofilm reactor. Pilot-scale growth studies and laboratory-scale HTL experiments were used to validate an engineering system model. The engineering system model served as the foundation to evaluate the economic feasibility and environmental impact of the system at full scale. Techno-economic results indicate that biomass feedstock costs dominated the minimum fuel selling price (MFSP), with a base case of $104.31 per gallon. Life-cycle assessment results show a basecase global warming potential (GWP) of 80 g CO2-e MJ(-1) and net energy ratio (NER) of 1.65 based on a well-to-product system boundary. Optimization of the system reduces MFSP, GWP and NER to $11.90 Gal(-1), -44 g CO2-e MJ(-1), and 0.33, respectively. The systems-level impacts of integrating algae cultivation with wastewater treatment were found to significantly reduce environmental impact. Sensitivity analysis showed that algal productivity most significantly affected fuel selling price, emphasizing the importance of optimizing biomass productivity. (C) 2016 Elsevier Ltd. All rights reserved.