A novel flat-panel airlift photobioreactor with an internal heat exchanger (FPA-IHE) separating the riser and downcomer zones was characterized. The proposed FPA-IHE has working volume of 2.2 L, height of 450 mm and light path of 50 mm. The overall heat transfer coefficients for the internal heat exchanger and the external surface of the reactor were 47.0 W m–2K–1 and 7.1 W m–2K–1, respectively. The mass transfer coefficient increased with an increase in the volumetric power input until a value of 0.01 s–1. The mixture time decreased with the increase in the superficial gas velocity of the riser. The circulation time ranged from 5 to 6 s. The specific growth rates of Dunaliella tertiolecta and Chlorella minutissima were high, 0.77 d–1 and 0.67 d–1, respectively; thus, the FPA-IHE photobioreactor is a promising environment for the development of highly productive processes using microalgae.