The shortage of energy and the aggravation of eutrophication are two major problems in China. The use of municipal wastewater to cultivate lipid-producing microalgae for the production of biodiesel not only reduces the production cost of biodiesel and alleviates energy shortage, but also mitigates eutrophication and protects the water environment. This study explored the effects of light, pH, and nutrients on the growth and lipid production of Scenedesmus obliquus, as well as the lipid production and pollutant removal capabilities of algae during microalgae cultivation in municipal wastewater at different treatment stages. The optimal conditions for the growth and lipid production of S. obliquus were determined as light intensity of 14,500 lx, total nitrogen (TN) content of 97 mg L⁻¹, total phosphorus (TP) content of 11 mg L⁻¹, and CO₂ content of 9.8%. Under these optimal conditions, the lipid yield from microalgae was 0.367 g L⁻¹, which was superior to other optimisation results in the literature. The total lipid yields of S. obliquus cultivated in the wastewater from the primary and secondary settling tanks were 0.38 g L⁻¹ and 0.33 g L⁻¹, respectively. The TN and TP removal rates were 99.8% and 83.1% from the wastewater of the primary settling tank, and 98.9% and 97.6% from the wastewater of the secondary settling tank, respectively. In addition, fluctuations in the quality of raw wastewater may lead to fluctuations in the final lipid yield, and a regulating tank should be used when necessary. In short, these results indicate the feasibility of cultivating lipid-producing microalgae in municipal wastewater for the production of biodiesel.