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Neochloris oleoabundans is an oleaginous microalgal species that can be cultivated in fresh water as well as salt water. Using salt water gives the opportunity to reduce production costs and the fresh water footprint for large scale cultivation. Production of triacylglycerols (TAG) usually includes a biomass growth phase in nitrogen-replete conditions followed by a TAG accumulation phase under nitrogen-deplete conditions. This is the first report that provides insight in the saline resistance mechanism of a fresh water oleaginous microalgae. To better understand the osmoregulatory mechanism of N. oleoabundans during growth and TAG accumulating conditions, the transcriptome was sequenced under four different conditions: fresh water nitrogen-replete and -deplete conditions, and salt water (525 mM dissolved salts, 448mM extra NaCl) nitrogen-replete and -deplete conditions. In this study, several pathways are identified to be responsible for salt water adaptation of N. oleoabundans under both nitrogen-replete and -deplete conditions. Proline and the ascorbate-glutathione cycle seem to be of importance for successful osmoregulation in N. oleoabundans. Genes involved in Proline biosynthesis were found to be upregulated in salt water. This was supported by Nuclear magnetic resonance (NMR) spectroscopy, which indicated an increase in proline content in the salt water nitrogen-replete condition. Additionally, the lipid accumulation pathway was studied to gain insight in the gene regulation in the first 24 hours after nitrogen was depleted. Oil accumulation is increased under nitrogen-deplete conditions in a comparable way in both fresh and salt water. The mechanism behind the biosynthesis of compatible osmolytes can be used to improve N. oleoabundans and other industrially relevant microalgal strains to create a more robust and sustainable production platform for microalgae derived products in the future.