Algal biomass is gaining importance for biofuel production as it is rich in lipids. It becomes more significant when biomass is produced by capturing atmospheric greenhouse gas, CO. In the present study, the effect of different physicochemical parameters were studied on the biomass and lipid productivity in Chlorella sp. MJ 11/11. The different parameters viz. initial pH, nitrate concentration, and phosphate concentration were optimized using single-parameter studies. The interactions between the parameters were determined statistically using the Box-Behnken design of optimization. The optimal values were decided by analyzing them with response surface methodology. The optimum levels of the parameters (pH 6.5, nitrate concentration 0.375 g L, and phosphate concentration 0.375 mL L) yielded a maximum biomass concentration of 1.26 g L at a constant light intensity of 100 μmol m s and temperature of 30 °C. The effect of CO concentration on the biomass production was also investigated and was found to be a maximum of 4 g L at 5 % air-CO mixture ( v/ v). Maximum lipid content of 24.6 % ( w/ w) was observed at 2 % air-CO mixture ( v/ v). Fatty acid analyses of the obtained algal biomass suggested that they could be a suitable feedstock for biodiesel production.