The potential use of algae in biofuels applications is receiving significant attention. However, none of the current algal model species are competitive production strains. Here we present a draft genome sequence and a genetic transformation method for the marine microalga Nannochloropsis gaditana CCMP526. We show that N. gaditana has highly favourable lipid yields, and is a promising production organism. The genome assembly includes nuclear (~29 Mb) and organellar genomes, and contains 9,052 gene models. We define the genes required for glycerolipid biogenesis and detail the differential regulation of genes during nitrogen-limited lipid biosynthesis. Phylogenomic analysis identifies genetic attributes of this organism, including unique stramenopile photosynthesis genes and gene expansions that may explain the distinguishing photoautotrophic phenotypes observed. The availability of a genome sequence and transformation methods will facilitate investigations into N. gaditana lipid biosynthesis and permit genetic engineering strategies to further improve this naturally productive alga.