||Algae are recognized as the most important sources for biodiesel production. The high cost for large scale cultivation of algae using expensive media hinders the sustainable development of this industry. Reduction of the cost for the large scale production process is the ultimate goal of our research. In the first part, a waste water based culture-induction system has been constructed. Microalgae cells were cultured in the defecated domestic sewage water and concentrated algal cells were induced by the industrial waste water from sugar production factory. The result showed that with a biomass productivity of 0.52g/L(dry biomass per liter medium), the basic cost of the biomass is only US$ 0.14/kg(dry biomass), which is much lower than the cost of as high as US$ 4.24/kg (dry biomass) that produced by the commercialized media. At the same time, the lipid content of the cells increased three folds as compared with the initial cells. In the second part, four candidate genes, DGAT, FATA, FAD2, DES were selected and expressed in the model expression system Saccharomyces cerevisiae. Results showed that DGA T transformants could significantly increase the lipid content by 40% compared to the strain with void vector. FAD2 transformants could accumulate linoleic acid (18:2) in the yeast cells, which would never exist in the wild strain. It is hoped that the lipid content and profile of microalgae could be improved by stable expression of these genes through synthetic biology technologies. This research is supported by HKUST R&D Corporation Funding (CGPL05).