Trend of biofuel production from microalgal triacylglycerols is enhancing, because this substrate is a good sustainable and advantageous alternative to oil and gas fuel. In the present study, indigenous micro algal isolates were screened from water (n=30) and soil (n=30) samples collected from three districts of Punjab, Pakistan to evaluate their biofuel production potential. The samples were inoculated on BG - 11 agar medium plates by incubating at room temperature of 25°C providing 1000 lux for 16h light cycle followed by 8h of dark cycle for 15 d. Water samples were found to be rich in microalgae and 65.33% microalgae (49 isolates) were isolated from Faisalabad district. On the basis of microscopic morphology microalgal isolates (n=180) were selected and subjected to lipid detection by Nile red staining assay. Nile red positive isolates (n=23) were processed for biochemical (lipid, protein and carbohydrates) characterization. AIN63 isolate showed higher lipids (17.4%) content as detected by micro vanillin assay. Algal isolate AIN128 showed best protein contents (42.91%) detected by Bradford assay and AIN172 isolate showed higher carbohydrate contents (73.83%) as detected by anthrone assay. The selected algal isolates were also analyzed by Fourier transform infrared (FTIR) spectroscopy for confirmation of carbohydrate, protein and lipid analysis. These indigenous algae have the potential for in-vitro biofuel production from agricultural waste.