Microalgae harvesting is an expensive and energy-intensive process. The application of chitosan, a waste-derived natural flocculant, for microalgae harvesting and biocrude quality enhancement might overcome this challenge. This study explored the optimization of microalgae harvesting by shrimp waste-derived chitosan and the production of high-quality biocrude from the harvested biomass through hydrothermal liquefaction (HTL). The study suggested that more than 95% of the microalgal biomass were harvested at 17–26 mg/L of chitosan dosing with a mixing time and speed of more than 11 min and 75 rpm, respectively. The biocrude produced from chitosan harvested microalgae (CMA) showed higher yield (37.9%) and energy value (35.4 MJ/kg) than gravity harvested microalgae (GMA) (yield 28.2% and HHV 30.3 MJ/kg). In addition, CMA biocrude had higher °API gravity (18.4) and a higher percentage (66%) of lighter hydrocarbon fraction (<C20), which indicated high-quality crude properties. Finally, the higher energy recovery (85.2%) and lower energy consumption ratio (0.58) of CMA biocrude confirmed the net energy positivity system. In this context, the findings demonstrated that applying waste-derived flocculant (chitosan) for wastewater-grown microalgae harvesting and high-quality biocrude production would potentially lead to a sustainable algal biorefinery system.