Microalgae can synthesize and accumulate high neutral lipids upon exposure to abiotic stress such as nutrient starvation or limitation. In this study, indigenous microalgae Chlorella sp. T4 was cultivated in nitrogen and phosphorus under both limiting and replete conditions. Growth, lipid yield, fatty acid profiles and biosynthetic gene expression levels were determined to ascertain cell’s response under these conditions. An impaired cell growth was observed under nitrogen limiting condition, evident by the lowest biomass yield (0.58±0.03 g L−1) as revealed by low quantum efficiency of photosystem II (Fv/Fm) value and chlorophyll a content. An increase in lipid content yield was observed under nitrogen and phosphorus limiting conditions as compared to the control. Nutrient limiting conditions produced fatty acid methyl ester that is suitable for biodiesel production compared to the control (BG-11). Gene expression analysis using real time q-PCR for photosynthesis (rbcL) and lipid biosynthesis (accD, KAS-1, ω-6 FAD, ω-3 FAD) genes revealed different expression levels under both limiting and replete conditions. Under nutrient limiting conditions, increase in the expression of accD, KAS-1, ω-6 FAD and ω-3 FAD genes was observed, whereas a decrease in rbcL gene expression level was noted. A significant correlation could be drawn between the expression levels of the biosynthetic genes and growth rate, biomass yield, physiological response, lipid yield and fatty acid composition. These results provide an insight into the physiological response and gene expression level under different nutrient levels, which could be harnessed for future genetic engineering of Chlorella sp. T4 for improved lipid production.