Heterotrophic fermentation has been proposed as an economically promising way to grow microalgae, a feedstock to produce microbial oils, which can substitute for fossil fuels and crop oil products. This study conducted a life cycle assessment (LCA) to evaluate the environmental impacts of microalgal oil produced from two microalgae Chlorella sp. and Schizochytrium sp., which were cultivated in commercial fermenters with a maximal volume of 60 m3. Algal oil produced from Chlorella sp. in autotrophic raceway ponds was also included as a base case this LCA study. The LCA results showed the oil produced by heterotrophic Schizochytrium sp. had generally lower impacts than autotrophic Chlorella sp. whereas oil produced from heterotrophic Chlorella sp. only had lower impacts in acidification, eutrophication, carcinogens, and ecotoxicity when compared to the autotrophic Chlorella sp. An in-depth analysis showed the algal fermentation stage accounted for over 86% of the total impacts in all categories, and nutrients and electricity use in fermentation caused the major impacts. Due to its high biomass density and high oil content properties, the harvest stage with a series of dewatering and lipid extraction steps for heterotrophic algae was processed with fewer impacts than autotrophic algae. This paper also compared four sugar sources used to grow algae in fermenters and found out that the sorghum stem was the best nutrient feedstock for fermentation. Finally, the authors determined the best fermentation time as around 131 h in algae cultivation to obtain a relatively high oil yield while keeping low environmental impacts.