Microalgae are considered to be more useful and effective to use in biomass production than other photosynthesis organisms. However, microalgae need to be altered to acquire more desirable traits for the relevant purpose. Although neutron radiation is known to induce DNA mutations, there have been few studies on its application to microalgae, and the optimal relationship between irradiation intensity and mutation occurrence has not been established. In this study, using the unicellular red alga Cyanidioschyzon merolae as a model, we analyzed the relationship between the absorbed dose of two types of neutrons, high-energy (above 1 MeV) and thermal (around 25 meV) neutrons, and mutation occurrence while monitoring mutations in URA5.3 gene encoding UMP synthase. As a result, the highest mutational occurrence was observed when the cells were irradiated with 20 Gy of high-energy neutrons and 13 Gy of thermal neutrons. Using these optimal neutron irradiation conditions, we next attempted to improve the lipid accumulation of Euglena gracilis, which is a candidate strain for biofuel feedstock production. As a result, we obtained several strains with a maximum 1.3-fold increase in lipid accumulation compared with the wild-type. These results indicate that microalgae breeding by neutron irradiation is effective.