One of the renewable sources of energy, microalgae (Spirulina platensis) is a good source of feedstock for the production of various biochemicals because of their unique properties. Sago effluent pose a serious environment pollution, if discharged on both soil and water bodies without proper treatment. In this study, we attempted cultivation of S. platensis using raw sago effluent diluted with water at different dilution levels viz.,90:10, 80:20, 70:30, 60:40, 50:50, 40:60,30:70,20:80 (sago effluent : water) and 100% (Undiluted) supplemented with different concentrations of NaHCO3 ,K2HPO4 and NaNO3 sources as carbon, phosphorus and nitrogen respectively, based on Zarrouck’s broth composition. The best cellular growth of S. platensis was observed in sago effluent medium was 60:40 dilution with NaHCO3 (10. g L-1) as carbon source, K2HPO4 (0.50 g L-1) as a phosphorus source and NaNO3 (3.00 g L-1) as a nitrogen source, with trace of FeSO4 and EDTA at pH 9.0. Parameters like, dry weight, chlorophyll, lipid and protein content were measured. The BOD, COD, TSS, TDS and organic carbon content of sago effluent were also significantly reduced indicating that sago effluent is further purified by Spirulina cultivation, which also serves as the single cell protein for farm animals. The use of sago effluent for the cultivation of microalgae is therefore an attractive economic venture and also a demonstration of Sustainable Resource Management (SRM).