A life cycle assessment (LCA) focused on greenhouse gas (GHG) emissions from the production of microalgal biodiesel was carried out based on a detailed engineering and economic analysis. This LCA applies the methodology of the California Low Carbon Fuel Standard (CA LCFS) and uses life cycle inventory (LCI) data for process inputs, based on the California-Modified Greenhouse Gases, Regulated Emissions, and Energy use in Transportation (CA GREET) model. Based on detailed mass and energy balances, calculated GHG emissions from this algal biodiesel system are 70% lower than those of conventional diesel fuel, meeting the minimum 50% GHG reduction requirements under the EPA RFS2 and 60% for the European Union Renewable Energy Directive. This LCA study provides a guide to the research and development objectives that must be achieved to meet both economic and environmental goals for microalgae biodiesel production.