The feasibility of a carbon recycling system that transforms algal residue to volatile fatty acids (VFAs) for re cultivating microalgae was evaluated based on a carbon balance analysis of major VFAs consisting of acetate (HAc), propionate (HPr), and butyrate (HBu). This system largely involves two processes: (i) bioconversion of algal residue to VFAs by anaerobic fermentation, and (ii) cultivation of microalgae using the produced VFAs. The carbon balance for each unit process was examined to assess how much carbon in algal residue can be converted to these major VFAs and then assimilated to microalgae biomass. First, the yield and the profile of VFAs from raw algae (RA) and lipid-extracted algae (LEA) at psychrophilic (15 degrees C), mesophilic (35 degrees C), and thermophilic conditions (55 degrees C) were compared. When digesting the LEA under the thermophilic condition, the highest conversion yield, 0.36 (g carbon in VFAs/g carbon in biomass), with a compositional ratio of 6:1:3 (HAc: HPr: HBu) was obtained. Consumption of VFAs for microalgal growth reached a maximum value of 0.66 (g VFAs assimilated to biomass/g VFAs provided) at the compositional ratio of 6:1:3. Consequently, the maximum total carbon recycling ratio was 23.8% when fermenting LEA at the thermophilic condition. Our findings comprehensively revealed that establishing conditions that convert LEA to higher content of acetate is a decisive factor. It was estimated that around 40% of the total carbon from the LEA can be recovered for the production of algal biomass, when increasing the VFA conversion yield beyond 60% by adopting pretreatment methods.