Microalgae are known to produce neutral-lipids such as triacylglycerols (TAGs), a raw material required for biofuel production. The present study aimed to screen the high lipid producing native microalgae strains from freshwater habitats, select appropriate methods to extract lipid from wet algal biomass, and study fatty acid compositions. At first, isolated twenty native strains among them two isolates that exhibited higher lipid content was further subjected to molecular characterization. Results based on the cell morphology, molecular characterization, and phylogenetic analysis indicated that these two strains were Tetradesmus obliquus and Ettlia oleoabundans. Based on the growth study of screened algal strains, the biomass ranged from 0.65 g/L to 6.03 g/L with Tetradesmus obliquus providing the highest biomass and total lipid content of 51% when cultured in a nitrogen-deprived medium. The highest lipid yield was obtained with hexane:isopropanol (2 : 1) solvent mixtures, accompanied by an optimized cell wall disruption method. Additionally, it was found that Tetradesmus obliquus had higher contents of saturated and monounsaturated fatty acids, i.e., 36.19% and 31.49%, respectively, in nitrogen-deprived medium (N?), whereas in nitrogen-containing medium (N+) was 27.34% and 28.85%, respectively. Hence, this suggests their suitability for biofuel production.