The economic and employment impacts of algae-derived biodiesel industrial development in China are analyzed based on an input–output (I–O) model in this work. The results show that the algae-derived biodiesel industry has a significant impact on promoting regional economic and employment growth. In China, due to the development of algae-derived biodiesel with an annual production of 0.2milliont, the economic growth can reach from 5.08 billion to 17.87 billion CNY, while employment growth can be from 39,200 to 104,000 jobs. However, because of the differences in the regional industrial structure, product distribution and marginal consumption propensity, the regional economic and employment impacts vary significantly in China. For example, the biggest economic and employment impacts of the algae-derived biodiesel industry are seen in Yunnan followed by Guangxi, Hubei and Henan, with the smallest being in Hunan. A sensitivity analysis shows that certain social-economic parameters, including the post-factory price of biodiesel, marginal consumption propensity, production scale and production taxes, are more sensitive to economic impact than others. Furthermore, certain technical parameters, including biomass productivity, lipid content, running time, lipid extraction rate and lipid conversion rate, have a susceptible impact on employment than others. To achieve the maximum socio-economic benefit of algae-derived biodiesel development, areas should be chosen that have a large potential and a high socio-economic impact multiplier, taking full account of the conditions relating to the regional climate, marginal land, and socio-economic factors.