A properly selected algae strain can be cultivated in a photobioreactor, harvested and extracted with indigenous techniques and processed for biodiesel production. The goal of our research is to carry out an integrated assessment of the technical and economic aspects of algae-based biodiesel as an alternative source of fuel to deal with the energy crisis of the agriculture sector in Bangladesh. Photobioreactors of various designs were locally constructed and certain algae strains readily available in Bangladesh were grown. The obtained results show that the open pond system may not be suitable for Bangladesh, primarily because of the requirement for a large land area. For closed photobioreactor systems, local engineering practices and designs have been explored and economic analyses have been conducted to arrive at a realistic technical assessment of the potential for algae biodiesel production and its economic attractiveness, respectively. Although the current project appears to be expensive at the moment, improvements in photobioreactor design and the employment of algae strains with higher lipid content will pave the way for economic biodiesel production in the future.