Biodiesel produced from microalgae has been extensively studied due to its potentially outstanding advantages over traditional transportation fuels. In order to facilitate its industrialization and improve the process profitability, it is vital to construct highly accurate models capable of predicting the complex behavior of the investigated biosystem for process optimization and control, which forms the current research goal. Three original contributions are described in this paper. Firstly, a dynamic model is constructed to simulate the complicated effect of light intensity, nutrient supply and light attenuation on both biomass growth and biolipid production. Secondly, chlorophyll fluorescence, an instantly measurable variable and indicator of photosynthetic activity, is embedded into the model to monitor and update model accuracy especially for the purpose of future process optimal control, and its correlation between intracellular nitrogen content is quantified, which to the best of our knowledge has never been addressed so far. Thirdly, a thorough experimental verification is conducted under different scenarios including both continuous illumination and light/dark cycle conditions to testify the model predictive capability particularly for long-term operation, and it is concluded that the current model is characterized by a high level of predictive capability. Based on the model, the optimal light intensity for algal biomass growth and lipid synthesis is estimated. This work, therefore, paves the way to forward future process design and real-time optimization.