In this study, we examined a Chlorella vulgaris-based system as a potential solution to change liquid waste, such as blackwater, into valuable products for agriculture while protecting waters from pollution without technical demanding pre-treatment. To evaluate the possibility of nutrient removal and biomass production from raw blackwater, four blackwater dilutions were tested at lab-scale: 50%, 30%, 20%, and 10%. The results showed that even the less diluted raw blackwater was a suitable growth medium for microalgae C. vulgaris. As expected, the optimum conditions were observed in 10% blackwater with the highest growth rate (0.265 d−1) and a nutrient removal efficiency of 99.6% for ammonium and 33.7% for phosphate. However, the highest biomass productivity (5.581 mg chlorophyll-a L−1 d−1) and total biomass (332.82 mg dry weight L−1) were achieved in 50% blackwater together with the highest chemical oxygen demand removal (81%) as a result of the highest nutrient content and thus prolonged growth phase. The results suggested that the dilution factor of 0.5 followed by microalgae cultivation with a hydraulic retention time of 14 days could offer the highest biomass production for the potential use in agriculture and, in parallel, a way to treat raw blackwater from source-separation sanitation systems.