Oleaginous microalgae have been considered promising sources of biodiesel due to their high lipid content. Nitrogen limitation/starvation is one of the most prominent strategies to induce lipid accumulation in microalgae. Nonetheless, despite numerous studies, the mechanism underlying this approach is not well understood. The aim of this study was to investigate the effect of nitrogen limitation and starvation on biochemical and morphological changes in the microalga Chlorella vulgaris FACHB-1068, thereby obtaining the optimal nitrogen stress strategy for maximizing the lipid productivity of microalgal biomass. The results showed that nitrogen limitation (nitrate concentration < 21.66 mg/L) and starvation enhanced the lipid content but generally decreased the biomass productivity, pigment concentration, and protein content in algal cells. Comparatively, 3-day nitrogen starvation was found to be a more suitable strategy to produce lipid-rich biomass. It resulted in an increased biomass production and satisfactory lipid content of 266 mg/L and 31.33%, respectively. Besides, nitrogen starvation caused significant changes in cell morphology, with an increase in numbers and total size of lipid droplets and starch granules. Under nitrogen starvation, saturated fatty acids (C-16:0, C-20:0, and C-18:0) accounted for the majority of the total fatty acids (~80%), making C. vulgaris FACHB-1068 a potential feedstock for biodiesel production. Our work may contribute to a better understanding of the biochemical and morphological changes in microalgae under nitrogen stress. Besides, our work may provide valuable information on increasing the lipid productivity of oleaginous microalgae by regulating nitrogen supply.