Coal bed methane (CBM) production has resulted in thousands of ponds in the Powder River Basin of low-quality water in a water-challenged region. A green alga isolate, PW95, was isolated from a CBM production pond, and analysis of a partial ribosomal gene sequence indicated the isolate belongs to the Chlorococcaceae family. Different combinations of macro- and micronutrients were evaluated for PW95 growth in CBM water compared to a defined medium. A small level of growth was observed in unamended CBM water (0.15 g/l), and biomass increased (2-fold) in amended CBM water or defined growth medium. The highest growth rate was observed in CBM water amended with both N and P, and the unamended CBM water displayed the lowest growth rate. The highest lipid content (27%) was observed in CBM water with nitrate, and a significant level of lipid accumulation was not observed in the defined growth medium. Growth analysis indicated that nitrate deprivation coincided with lipid accumulation in CBM production water, and lipid accumulation did not increase with additional phosphorus limitation. The presented results show that CBM production wastewater can be minimally amended and used for the cultivation of a native, lipid-accumulating alga.