A fast growing strain of Chlorella saccharophila was isolated from the marine water of New Zealand and grown in heterotrophic conditions using glucose or glycerol as a carbon source. Biomass production was found to be higher in culture fed with glucose (2.14±0.08gL-1) as compared to glycerol (0.378±0.04gL-1). Lipid accumulation was similar for both carbon sources, at approximately 22% of dry cell weight. However, carotenoid yield was higher with glycerol (0.406±0.0125mgg-1) than with glucose (0.21±0.034mgg-1). Further optimization of the growth of the isolate gave maximal carotenoid production of 16.39±1.19mgg-1 total carotenoid, containing 11.32±0.64mgg-1 zeaxanthin and 5.07±0.55mgg-1 β-carotene. Comparison of various chemical and physical carotenoid extraction methods showed that ultrasonication was required for maximum extraction yields. The new strain has potential for biofuel, with carotenoid co-production.