Optimization of direct liquefaction and conversion of wet algal biomass (Nannochloropsis sp.) to biodiesel under supercritical methanol conditions using response surface methodology (RSM) has been demonstrated. This one-step process allows for simultaneous extraction and transesterification of wet algal biomass. A response surface methodology (RSM) was used to analyze the influence of the three process variables, namely, the wet algae to methanol (wt/vol) ratio (1:4 to 1:12 wt/vol), the reaction temperature (240-260 ºC), and the reaction time (10-30 min) on the fatty acid methyl ester (FAMEs) conversion. The characterization of wet algal biomass was done with SEM-EDS, TEM and XRD while the analysis of algal biodiesel samples was carried out using ATR-FTIR, GC-MS and thin layer chromatography (TLC) methods. The single-step process has the potential to provide an energy efficient and economical route for algal biodiesel production.