CO 2 fixation by phototrophic microalgae and cyanobacteria is seen as a possible global carbon emissions reducer; however, novel microalgae and cyanobacterial strains with tolerance to elevated temperatures and CO 2 concentrations are essential for further development of algae-based carbon capture. Four novel strains isolated from the Arabian Gulf were investigated for their thermotolerance and CO 2-tolerance, as well as their carbon capture capability. Two strains, Leptolyngbya sp. and Picochlorum sp., grew well at 40°C, with productivities of 106.6 ± 10.0 and 87.5 ± 2.1 mg biomass L −1 d −1 , respectively. Tetraselmis sp. isolate showed the highest biomass productivity and carbon capture rate of 157.7 ± 10.3 mg biomass L −1 d −1 and 270.8 ± 23.9 mg CO 2 L −1 d −1 , respectively, both at 30°C. Under 20% CO 2 , the biomass productivity increased over 2-fold for both Tetraselmis and Picochlorum isolates, to 333.8 ± 41.1 and 244.7 ± 29.5 mg biomass L −1 d −1. These two isolates also presented significant amounts of lipids, up to 25.6 ± 0.9% and 28.0 ± 2.0% (w/w), as well as presence of EPA and DHA. Picochlorum sp. was found to have a suitable FAME profile for biodiesel production. Both Tetraselmis and Picochlorum isolates showed promising characteristics, making them valuable strains for further investigation towards commercial applications and CO 2 capture.