Phycoremediation uses algae as an ecotechnological tool to recycle eutrophic and polluted wastewater from industries. It is vital for fostering a sustainable circular bioeconomy, as the resulting algal biomass can be utilized as a versatile industrial bioresource. This approach is especially pertinent for the dairy industry, which produces substantial amounts of nutrient-rich dairy wastewater (DWW). The effectiveness of phycoremediation of DWW depends on the knowledge of indigenous algae that can thrive in such conditions and rapidly produce lipid-rich or nutraceutically or otherwise valuable biomass. This study assessed the lab-scale phycoremediation of DWW, emphasizing the biomass production potential and quality of three fast-growing green microalgae: Chlorolobion braunii, Scenedesmus javanensis, and Halochlorella rubescens, which are recognized for their high lipid yield potential in growth media. We assessed nutrient and mineral removal efficiency, biomass yield, productivity, biomass quality, and the biodiesel properties of lipids from these algae after ten days of growth in various dilutions and 100 % DWW. C. braunii demonstrated the highest biomass productivity of 149.32 mg L−1 d−1 in 100 % DWW. All species significantly reduced biochemical oxygen demand (BOD), chemical oxygen demand (COD), and total dissolved solids (TDS) of DWW, achieving complete removal of nutrients, along with 80–100 % removal of heavy metals after growth in DWW. C. braunii had a lipid productivity of 49.79 mg L−1 d−1 in 100 % DWW, and lipids from C. braunii and S. javanensis were suitable for biodiesel production, highlighting their potential for large-scale industrial phycoremediation of DWW while generating biodiesel-grade lipids and other valuable bioproducts.