Heavy metal (HM) pollution is a serious agro‐economic concern and algae can be used as one of the bioremediating agents as it can grow in different water bodies. In this study, the Scenedesmus acutus and Chlorella pyrenoidosa were exposed to various concentrations of Pb2+ for 96 h and a multidimensional toxicity assessment has been performed by pulse amplitude modulation technique and Fourier transform infrared spectroscopy (FTIR). High‐angle annular dark‐field scanning transmission electron microscopy coupled energy dispersive spectroscopy (HAADF‐S/TEM‐EDS) detected intracellular localization of Pb2+, thus confirming algal bio‐accumulation abilities. Sensitivity assay demonstrated that 500 and 400 ppm of Pb2+ as minimum inhibitory concentrations (MIC50) for S. acutus and C. pyrenoidosa, respectively, which inhibited growth (OD) by >50% in 96 h. During bioremoval studies, S. acutus and C. pyrenoidosa were found to remove ∼52 and ∼32% of total Pb2+, respectively. The particulate analysis of Pb2+ by ICP‐OES showed >99.5% biosorption capacity by both the species. The biomass characterization by FTIR showed the involvement of various cell wall functional groups such as hydroxyl, alkane, and C=C groups in the biosorption of Pb2+ by both the species. The noninvasive chlorophyll fluorescence techniques provide a quick insight on heavy metal stress and can be adapted as a rapid detection tool to study the Pb2+ stress. S. acutus strain showed higher tolerance and higher bioremoval capacity than C. pyrenoidosa. However, both the species can be exploited for biosorption of Pb2+ from aquatic streams as an alternative way for low cost Pb2+recovery systems.