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The feasibility of biodiesel production from microalgae as third generation biodiesel feedstock was studied in the present investigation. The studies were conducted to evaluate the growth patterns of the algae species i.e. Spirulina, Chlorella and pond water algae. The oil was extracted from the algae biomass and then transesterified. Simultaneous extraction and transesterification were also studied using different solvents. Maximum biodiesel yield was obtained using simultaneous extraction and transesterification using hexane as a solvent. The systematic characterization of algae biomass, algae oil and algae biodiesel was carried out to establish the potential of microalgae for biodiesel production.