Microalgal strains for algal biofuels production in outdoor ponds will need to have high net growth rates under diverse environmental conditions. A small, variable salinity pond in the San Elijo Lagoon estuary in southern California was chosen to serve as a model pond due to its routinely high chlorophyll content. Profiles of microalgal assemblages from water samples collected from April 2011 to January 2012 were obtained by constructing 18S rDNA environmental clone libraries. Pond assemblages were found to be dominated by green algae Picochlorum sp. and Picocystis sp. throughout the year. Pigment analysis suggested that the two species contributed most of the chlorophyll a of the pond, which ranged from 21.9 to 664.3 μg · L−1 with the Picocystis contribution increasing at higher salinities. However, changes of temperature, salinity or irradiance may have enabled a bloom of the diatom Chaetoceros sp. in June 2011. Isolates of these microalgae were obtained and their growth rates characterized as a function of temperature and salinity. Chaetoceros sp. had the highest growth rate over the temperature test range while it showed the most sensitivity to high salinity. All three strains showed the presence of lipid bodies during nitrogen starvation, suggesting they have potential as future biofuels strains.