Direct conversion of microalgae to advanced biofuels with hydrothermal liquefaction (HTL) is an attractive option which has drawn attention in recent years. The presence of heteroatoms in the resultant biocrude, energy input and the process water has been a long-term concern. In this study, the pretreatment of microalgae biomass for protein extraction was conducted prior to HTL for biocrude production. The impact of operating conditions on both the pretreatment and hydrothermal liquefaction steps was investigated. Following HTL using the pretreated algae with an initial solid content of 16% w/w for 30 min at 310 °C, the biocrude yield was 65 wt%, which was more than a 50% improvement in yield as compared to HTL of untreated algae under the same reaction conditions. To achieve a similar biocrude yield using the untreated algae required a much higher reaction temperature of 350 °C. Using recycled process water as reaction media led to a 25 wt% higher biocrude yield. HTL of pretreated algae led to 32–46% nitrogen reduction in resultant biocrude. The biocrude had a higher heating value (HHV) of 28 MJ kg⁻¹ to 34 MJ kg⁻¹. A maximum of 15 wt% protein extract was obtained during pretreatment at 150 °C, 20 min. A similar energy input was required in biocrude production from the untreated route and the combined pretreatment and HTL.