In this research, microalgae species,Chlorella protothecoideswas selected for biodiesel production due to its ability to produce large amount of hydrocarbons and oils with high lipid composition. The extracted bio-oil was characterized systematically by proximate, ultimate, spectral (FT-IR, UV-vis., GC-Mass,H-1 NMR and(13)C NMR) and thermogravimetric (TG/DTA) techniques. The fuel characterization of the bio-oil was evaluated using standard methods. The bio-oil samples were examined for their notable in vitro antimicrobial as well as antioxidant activities. The engine parameters unlike brake specific fuel consumption and brake thermal efficiency for three fuel samples namely diesel (B100), microalga biodiesel 20% blend (CB20) and microalga biodiesel 50% blend (CB50) along with their emission characteristics towards CO2, NOx, and HCs were measured. Graphic Chlorella protothecoidesmicro alga was selected for bio-oil extraction. The bio-oil extracted was characterized by proximate, elemental, spectral and thermogravimetric techniques and their biodiesel potentiality, the fuel properties were evaluated using standard methods, consequently compared to the standards. In addition, the bio-oil samples were tested for their in vitro antimicrobial and antioxidant activities. The fuel properties show that the microalgae bio-diesel has a cold filter plugging point (CFPP) around -13 degrees C with 4.5 h oxidation stability. The micro algal oil produces high efficiency (eta(bth)), low BSFC with lesser CO, (NO)x and hydrocarbons emissions with a single cylinder, water cooled, DI four stroke diesel engines using algae oil blends which is an alternative to diesel engine. Moreover, CB50 blend has a good combustion and emission characteristics when compared to CB20 and B100 fuels.