The aquatic fern Azolla is one of the fastest-growing nitrogen-fixing plants on Earth and therefore considered as a potential source of biomass for bioenergy production. The lipid fraction from Azolla filiculoides was analyzed to investigate whether it suited biodiesel production. Since the productivity of Azolla is further increased at higher CO2 concentrations, A. filiculoides biomass was produced at 800 ppm CO2 mimicking a cultivation system utilizing CO2 waste from industry. The harvested biomass contained 7.92 ± 0.14 % dry weight (dw) crude lipids. Drying conditions did not significantly affect lipid composition or yields, indicating that drying conditions may be energetically optimized without the risk of product loss. Total lipid extracts contained 4.2 ± 0.38 % free fatty acids. Of the crude lipid fraction, 41 ± 13 % consisted of fatty acids that were converted into fatty acid methyl esters upon saponification in methanol. Unique mid-chain (di)hydroxy compounds constituted 7.2 ± 2.8 % of the crude lipids. Based on the fatty acid profile, it was estimated that Azolla biodiesel meets requirements set by the EN14214 standard on fuel density, cetane number, and iodine value. The cold filter plugging point (CFPP), however, is expected to be too high due to relatively high concentrations of lignoceric acid and the presence of the mid-chain (di)hydroxy compounds. To produce high-quality biodiesel from Azolla lipids, therefore, a fractionation step will be required removing these compounds. As an advantage, the long-chain alcohols and (di)hydroxy fatty acids obtained after fractionation may provide a valuable secondary product stream with applications to chemical industry and nutrition.