Dunaliella tertiolecta was grown in an oilfield-produced water-based medium (PW) over a wide range of salinities (30–210 g total dissolved solids (TDS) L−1). Similar biomass productivity was observed from 30 to 120 g TDS L−1 with decreased growth at the higher salinities of 180 and 210 g TDS L−1. Biomass productivity in all PW conditions was higher than in the commercial f/2 algae growth medium (35 g TDS L−1), which may have been the result of higher bicarbonate concentration of the PW (20 vs. 2 mM). In the lower salinity conditions (30 and 60 g TDS L−1), the total lipid component of biomass was highest at about 35–40% coinciding with nutrient depletion (nitrogen and phosphorus). The lipid fraction then decreased in the nutrient-depleted media as the culture added biomass. Early lipid enrichment in the 30 and 60 g TDS L−1 conditions coincided with peak pH which likely represented maximum bicarbonate uptake. The higher salinities tested (120, 180, and 210 g TDS L−1) displayed a different pattern of an increasing lipid fraction of biomass in a nutrient-depleted media until stationary phase (peak total lipid fraction approximately 31–34%). Fatty acid methyl ester profiles (FAME) at all salinities tested were dominated by C16:0 with a lesser amount of unsaturated C18 carbon chains and should produce a quality biodiesel. The characteristic of the FAME did not vary considerably by salinity. Increased biomass and lipid productivity might result from utilizing hypersaline PW with high bicarbonate concentrations (often already present) for algae cultivation.