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Microalgae have recently garnered substantial interests for biofuel production. The overall goal of this research is to develop an optical sensor based on Nile Red fluorescence (NRf) that can quantify algal neutral lipids real time in situ. The specific objective of this study is to elucidate the effect of several important parameters on NRf signal intensity including emission maxima, temperature, staining time, and algal species. Three algae species, Nannochloropsis Oculata, Nannochloropsis Salina, and Botryococcus braunii (Race A and B), were used. A spectrofluorometer was used to identify NRf emission maxima and investigate the temperature effect; and a single-band fluorometer was used to investigate the effect of staining time and species. For all algae types, the NRf emission maximum is at 590 nm. Temperature has a large impact, with NRf intensity increasing almost proportionally with temperature. NRf signal increases from minute 0 to 4 after staining. Finally, NRf intensity is linearly correlated with the neutral lipid content in algae culture (using optical density of the culture as a proxy, R2=0.96 and 0.88 for Nanno. and B. braunii, respectively) but the relationship is dependent on species.