BACKGROUND The quality and quantity of lipids in microalgae mainly depend on nitrogen and phosphorous supply. In the present study, growth of newly isolated microalgal strain, Chlorococcum sp. IM-03 has been studied under nitrogen stressed conditions. Fluorescence microscopy and Fourier transform infrared spectroscopy have been used to observe changes in lipid and carbohydrate content. RESULTS Growth of selected species is monitored in terms of dry biomass and chlorophyll content under varying sodium nitrate concentration, viz. 0, 100 and 1500 mg L−1 (designated as N0, N100 and N1500, respectively). N100 was selected in the experimental plan as similar levels were observed in domestic wastewater, which can be used as possible culture media for mass cultivation. Maximum chlorophyll concentration (72.65 µg mg−1) was found at N100. It was also observed that cultivation at N100 resulted in highest lipid content of 17.8%. Carbohydrate content was 18% at N100 with moderate increase to 19.8% at N1500. CONCLUSIONS On the basis of the current study, it can be concluded that sodium nitrate concentration of 100 mg L−1 (N100) offers enhanced production of lipids in Chlorococcum sp. without compromising growth. © 2015 Society of Chemical Industry