To overcome the bottlenecks of high cost and low production yields that restrict the commercial production of microalgae biodiesel, the use of xylose was evaluate by Scenedesmus quadricauda FACHB-1297, which was shown to be capable of mixotrophic and heterotrophic growth and lipid production on xylose, rich in the waste streams from pulp and paper industry, with increases in lipid productivities of 35.8-fold (mixotrophic) and 9.2-fold (heterotrophic) in comparison to photoautotrophic lipid yields. Five doses of xylose were tested to determine the effects and mechanisms of the carbon source on microalgae in mixotrophic mode. At the optimal xylose dosage of 4 g/L, the highest lipid content (38.61%) and productivity (139.55 mg/L/d) were achieved besides maximum biomass productivity (361.4 mg/L/d), nutrient removal efficiency of 68.4% (nitrogen), 97.2% (phosphorus) and 35.2% (xylose). Those indicated that S. quadricauda FACHB-1297 was suitable for further development of using xylose from certain waste streams for biofuel production.