Microalgae are recognized for serving as a sustainable source for biodiesel production. This study investigated the effect of nitrogen starvation strategies and photobioreactor design on the performance of lipid production and of CO2 fixation of an indigenous microalga Chlorella vulgaris ESP-31. Comparison of single-stage and two-stage nitrogen starvation strategies shows that single-stage cultivation on basal medium with low initial nitrogen source concentration (i.e., 0.313 g/L KNO3) was the most effective approach to enhance microalgal lipid production, attaining a lipid productivity of 78 mg/L/d and a lipid content of 55.9%. The lipid productivity of C. vulgaris ESP-31 was further upgraded to 132.4 mg/L/d when it was grown in a vertical tubular photobioreactor with a high surface to volume ratio of 109.3 m2/m3. The high lipid productivity was also accompanied by fixation of 6.36 g CO2 during the 10-day photoautotrophic growth with a CO2 fixation rate of 430 mg/L/d. Analysis of fatty acid composition of the microalgal lipid indicates that over 65% of fatty acids in the microalgal lipid are saturated [i.e., palmitic acid (C16:0) and stearic acid (C18:0)] and monounsaturated [i.e., oleic acid (C18:1)]. This lipid quality is suitable for biodiesel production.