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This study investigates the physiological and biochemical responses of a newly isolated microalgal strain, Dictyosphaerium sp. AM-2024a, identified through 18S rDNA sequencing, under varying environmental conditions and microplastic (MP) interactions. Optimal growth of strain AM-2024a was achieved at pH 9, with a 3.55% increase in biomass compared to the control. Sodium bicarbonate supplementation at 50 mM significantly enhanced productivity, with biomass increasing by 45.17%, chlorophyll a by 393.56%, and carbohydrates by 146.42%. This is the first report exploring the interaction of this strain with MPs, specifically low-density polyethylene (LDPE), selected for its environmental prevalence and relevance to aquatic pollution. Exposure to LDPE MPs resulted in a concentration-dependent reduction in biomass (up to 13.95% at 50 mg/L), whereas further analysis indicated the strain's ability to utilize LDPE as part of its metabolic processes. Gas chromatography–mass spectrometry (GC–MS) analysis of fatty acid methyl esters (FAMEs) revealed a favorable lipid profile, dominated by C16 and C18 fatty acids, yielding 84.75% FAMEs, underscoring the strain's potential for sustainable biodiesel production. This study highlights Dictyosphaerium sp. AM-2024a as a novel and robust candidate for biofuel applications and pollutant mitigation, providing a foundation for future research into its ecological and industrial applications.