Rice straw (RS) is a widely available agricultural residue with significant potential for biogas production and feed applications; however, its poor digestibility and nutritional value limit its utilization. This study explores an innovative approach to enhance the digestibility and nutritional value of RS by cultivating Chlorella vulgaris through immobilization technology on RS, using liquid manure (LM) as an alternative to the traditional BG11 medium. The results showed an increase in chlorophyll a (Chl a) after 12 days for both the BG11 medium and LM-based treatments, from 0.13 to 0.34 and 0.24 mg Chl a/g product (DM), respectively. Additionally, the immobilized microalgal biomass increased to 284.18 and 170.14 mg algal biomass/g product (DM), respectively. Soaking under microaerobic conditions during cultivation led to the partial degradation of RS. This, combined with the formed microalgal biofilm, contributed to an improved digestibility of the dry matter, reaching 69.1% and 65.9% for the final products based on the BG11 medium and LM mediums, respectively, compared to 52.1% for the raw RS. Furthermore, the crude protein and lipids contents were significantly improved with the potential for applications in feed, reaching 21.4% and 4.1% for the BG11 medium-based product, while they were observed to be 12.8% and 3.0%, respectively, for the LM-based product. Additionally, carbon-to-nitrogen ratio was significantly reduced compared to the raw RS. The higher digestibility and improved nutritional value contributed to increased biogas production, reaching 129.3 and 118.7 mL/g (TS) for the products based on the traditional medium and LM medium, respectively, compared to 86.7 mL/g (TS) for the raw RS. The immobilization mechanism and biofilm development could be attributed to the roughness of the RS and extracellular polymer substances. This study demonstrates that integrating C. vulgaris cultivation on RS with LM as a nutrient source not only enhances the digestibility and nutritional value of RS but also offers a sustainable waste management solution with potential applications in biogas production and animal feed.