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SUMMARY Production of ammonia by urea‐grown Chlorella ellipsoidea was investigated. Ammonia was produced during the stationary growth phase in cultures with urea as sole nitrogen source and glucose as supplementary carbon source. Ammonia was produced only in medium containing excess urea and limiting amounts of glucose. Ammonia production was accompanied by increase in pH. In cultures with nitrate as sole nitrogen source and glucose as supplementary carbon source, growth and pH changes were similar to those in urea‐glucose medium, but no ammonia was detected. Cultures grown in urea‐acetate medium were similar to those grown in urea medium without additional organic carbon source. No ammonia was produced under these circumstances and growth was significantly lower than that achieved in glucose‐supplemented cultures. C. ellipsoidea evidently produces an enzyme or enzyme system which forms ammonia from urea. This organism was reportedly urease‐free because previous workers did not detect ammonia formation from urea. Our findings indicate that special circumstances are required to produce detectable amounts of ammonia from urea. These findings are in agreement with a recent report of urea‐splitting, cofactor‐requiring enzyme in cell‐free extracts of Chlorella.