In this study, phycoremediation of textile wastewater (TWW) by freshwater cyanobacterial strains such as sp., Oscillatoria sp. F01 and Oscillatoria sp. F02 was evaluated, and lipids were simultaneously extracted from biomass for biodiesel production. Onset of the study, Phormidium sp. and Oscillatoria sp. F01 has better growth rates, increased biomass production, high chlorophyll content, and efficient nutrient utilization in TWW compared to Oscillatoria sp. F02. Phormidium sp. showed 1.41 g/L dry weight, followed by Oscillatoria sp. F01 with 1.39 g/L and Oscillatoria sp. F02 with 1.02 g/L biomass. Both strains demonstrated their capability to elevate the pH level while reducing TDS and eliminating/reducing several nutrients such as nitrates, nitrites, phosphates, sulphates, sulphides, chlorides, calcium, sodium, and magnesium. Further, the total lipids extracted from the TWW-grown Phormidium sp., Oscillatoria sp. F01 and Oscillatoria sp. F02 was estimated to be 8.20, 13.70 and 11.20 %, respectively, on day 21, which was higher than the lipid content obtained from control cultures. Further, biodiesel produced from the lipids of all strains showed higher levels of C12:0, C16:0, C16:1, C18:1, C18:2, and C18:3 among all the fatty acids. Therefore, they can potentially offer a valuable source of lipids and diverse fatty acids for high-quality biodiesel production. This integrated system not only offers a solution for TWW treatment but also provides a feedstock for renewable fuel production simultaneously.