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Abstract: It is well-established that microalgal-derived biofuels have the potential to make a significant contribution to the US fuel market, due to several unique characteristics inherent to algae. Namely, autotrophic microalgae are capable of achieving very high efficiencies in converting solar energy into biomass and oil relative to terrestrial oilseed crops, while at the same time exhibiting great flexibility in the quality of land and water required for algal cultivation. These characteristics allow for the possibility to produce appreciable amounts of algal biofuels relative to today’s petroleum fuel market, while greatly mitigating “food-versus-fuel” concerns. However, there is a wide lack of public agreement on the near-term economic viability of algal biofuels, due to uncertainties and speculation on process scale-up associated with the nascent stage of the algal biofuel industry. The present study aims to establish baseline economics for two microalgae pathways, by performing a comprehensive analysis using a set of assumptions for what can plausibly be achieved within a five-year timeframe. Specific pathways include autotrophic production via both open pond and closed tubular photobioreactor (PBR) systems. The production scales were set at 10 million gallons per year of raw algal oil, subsequently upgraded to a “green diesel” blend stock via hydrotreating. Rigorous mass balances were performed using Aspen Plus simulation software, and associated costs were evaluated on a unit-level basis. Upon completing the base case scenarios, the cost of lipid production to achieve a 10% return was determined to be $8.52/gal for open ponds and $18.10/gal for PBRs. Hydrotreating to produce a diesel blend stock added onto this marginally, bringing the totals to $9.84/gal and $20.53/gal of diesel, for the respective cases. These costs have potential for significant improvement in the future if better microalgal strains can be identified that would be capable of sustaining high growth rates at high lipid content. Given that it is difficult to maximize both of these parameters simultaneously, it was determined that the near-term research should focus on maximizing lipid content as it offers more substantial cost reduction potential relative to an improved algae growth rate. Additional economic sensitivity studies were established to identify other important cost drivers, and a resource assessment comparison was made to evaluate parameters such as water and CO2 requirements. [Copyright &y& Elsevier]