Induction of oil accumulation in algae for biofuel production is often achieved by withholding nitrogen. However, withholding nitrogen often reduces total biomass yield. In this report, it is demonstrated that Chlorella sorokiniana will not only accumulate substantial quantities of neutral lipids when grown in the absence of nitrogen but will also exhibit unimpeded growth rates for up to 2 weeks. To determine the physiological basis for the observed increase in oil and biomass accumulation, we compared photosynthetic and respiration rates and chlorophyll, lipid, and total energy content under ammonia replete and deplete conditions. Under N-depleted growth conditions, there was a 64 % increase in total energy density and a ∼20-fold increase in oil accumulation relative to N-replete growth leading to a 1.6-fold greater total energy yield in N-depleted than in N-replete cultures. We propose that the higher energy accumulation in N-depleted cultures is due to enhanced photosynthetic energy capture and conversion associated with reduced chlorophyll levels and reduced self-shading as well as a shift in metabolism leading to the accumulation of oils.