Concern about global warming and energy security has led to increased biomass utilization as an alternative feedstock to fossil fuels. Microalgae biofuels are likely to have a much lower impact on the environment. Microalgae cultivation using sewage with industrial flue gases is a promising concept for integrated bio-oil production, CO2 sequestration and nutrient recovery. Mixotrophic cultivation has given best results for microalgae biomass. Several mechanical and chemical processes are available for extraction of lipids components from microalgae biomass. In organic solvent extraction methods, a prior drying of biomass and recovery of the solvent is required which are energy-intensive. Thus, hydrothermal process overcomes the drawbacks of conventional methods where the biomass is converted into oily components by processing in a hot, pressurized water environment. In this process, in addition to the lipid fraction of microalgae, other value added products such as proteins, carbohydrates and nutrients can also be recovered. In the present study (Scenedesmus quadricauda) was cultivated mixotrophically using sewage wastewater and industrial flue gas in batch and continuous mode. The harvested algae biomass from S. quadricauda was used for the recovery of lipids and bio-oil. The lipids were extracted from the algal biomass using sonication as a cell disruption method followed by solvent (Hexane) extraction and the lipid yield obtained was 8.3 wt%. Hydrothermal process was also carried out for extraction of bio oil and the yield obtained was 18wt%. Nutrients such as NO3¯ (68%) and PO4¯ (15%) were also recovered along with bio-oil in hydrothermal process.