This research article investigates the extraction of bio-oil from Chlorella vulgaris algae which is then subjected to biodiesel production. To evaluate the maximum oil content, four different pretreatment methods and solvent systems were inspected. Among them, maximum oil yield was obtained from ultrasonic pretreated biomass followed by methanol and methyl tertiary butyl ether solvent extraction. Physico-chemical properties of the bio-oil were analyzed as per AOAC Official Methods. The experiments were then designed to determine how variation in different process parameters influences extraction. From these results, kinetic and thermodynamic parameters were also analyzed. The positive values of Delta S and Delta H and the negative value of Delta G indicate that this process is endothermic, irreversible and spontaneous, respectively. The extracted bio-oil was then subjected to acid catalyzed reaction for biodiesel production. A yield of 98.2 wt% biodiesel was obtained at the optimized condition. Fuel properties were analyzed as per ASTM methods.