Palm oil mill effluent (POME) highly consists of organic and inorganic pollutants that can arise environmental issues if not treated properly. In Malaysia, a series of ponding system is the common conventional method to treat POME. Removal of inorganic nutrients and organic pollutants was limited by an ineffective ponding system that requires long hydraulic retention time and emission of greenhouse gases. The utilization of microalgae for simultaneous wastewater treatment and biomass production is currently of global interest due to the high capacity for nutrient uptake for their metabolic and photosynthetic activities. The aim of this study is to determine the efficiency of Chlorella vulgaris in treating POME by investigating the effects of POME concentration on the removal of chemical oxygen demand (COD), ammoniacal nitrogen (NH3), and total phosphorus (TP) as well as biomass production. The microalgae cultivated with 10% POME yielded the highest biomass concentration of 0.603 g/L with a removal percentages of 80%, 99%, and 71% for COD, NH3, and TP at the end of treatment (p < 0.05). Furthermore, the pseudo-first-order kinetic model for the nutrients removal showed a decreasing pattern proportionate to the increase in phycoremediation time. This treatment system could be a viable technology for sustainable POME treatment considering the shorter treatment time required and its effectiveness in reducing the nutrients from POME.