Abstract Previously, we isolated Chlorella sp. HS2 (referred hereupon HS2) from a local tidal rock pool and demonstrated its halotolerance and relatively high biomass productivity under different salinity conditions. To further understand acclimation responses of this alga against high salinity stress, we performed transcriptome analysis of triplicated culture samples grown in freshwater and marine conditions at both exponential and stationary growth phases. De novo assembly followed by differential expression analysis identified 5907 and 6783 differentially expressed genes (DEGs) respectively at exponential and stationary phases from a total of 52770 transcripts, and the functional enrichment of DEGs with KEGG database resulted in 1445 KEGG Orthology (KO) groups with a defined differential expression. Specifically, the transcripts involved in photosynthesis, TCA and Calvin cycles were downregulated, whereas the upregulation of DNA repair mechanisms and an ABCB subfamily of eukaryotic type ABC transporter was observed at high salinity condition. In addition, while key enzymes associated with glycolysis pathway and triacylglycerol (TAG) synthesis were determined to be upregulated from early growth phase, salinity stress seemed to reduce the carbohydrate content of harvested biomass from 45.6 dw% to 14.7 dw% and nearly triple the total lipid content from 26.0 dw% to 62.0 dw%. These results suggest that the reallocation of storage carbon toward lipids played a significant role in conferring the viability of this alga under high salinity stress, most notably by remediating high level of cellular stress partially caused by ROS generated in oxygen-evolving thylakoids. Summary Statement Redirection of storage carbon towards the synthesis of lipids played a critical role in conferring the halotolerance of a Chlorella isolate by remediating excess oxidative stress experienced in photosystems.