BACKGROUNDMicroalga‐assisted wastewater treatment systems have gained attention for their efficiency in removing nutrients, chemical oxygen demand, toxic heavy metals and other dissolved compounds, while also producing valuable biomass and demonstrating high CO2 biofixation potential. The current research focuses on investigating the municipal wastewater phycoremediation and heavy metal biosorption ability of three indigenous freshwater microalgal strains: Tetradesmus reginae, Tetradesmus obliquus and Chlorella sorokiniana.RESULTSThe research findings indicate that the microalgal strains T. reginae, T. obliquus and C. sorokiniana exhibited notable performance in biomass accumulation. Specifically, the biomass accumulations were 2.215 ± 0.002, 1.143 ± 0.006 and 0.856 ± 0.021 g L−1, respectively, with initial culture biomasses ranging from 0.5 to 0.6 g L−1. These strains significantly reduced toxic heavy metals (As, 46.86–60.12%; Cd, 52.96–83.18%; Cr, 73.49–82.18%; and Pb, 95.38–96.25%), nutrients (NH4+ & NO3− 100% and PO43− 78–86.41%) as well as chemical oxygen demand (46.02–67.35%), and biosequestered CO2 (0.8–0.18 gCO2 L−1 d−1) during the growth period. Among the strains, T. reginae emerged as the top performer. The Fourier transform infrared spectra of the strain's biomass confirmed the presence of specific functional groups, such as CH, NH, OH and CN, which play a crucial role in ionising and reacting with toxic metal ions and protons in the wastewater.CONCLUSIONThis study has shown that the isolated wild microalgal strains have promising phycoremediation and heavy metal adsorption characteristics. Moreover, they exhibit promising rates of CO2 biosequestration. These findings underscore the potential of microalga‐assisted wastewater treatment systems for efficient and eco‐friendly wastewater remediation, as well as biomass generation and CO2 mitigation. © 2024 Society of Chemical Industry (SCI).