Urine is a potential source of nutrients to grow microalgal biomass to be re-used as fertilizer and soil conditioner. In this study the impact of photobioreactor dilution rate on microalgae productivity and photosynthetic efficiency was assessed and used to determine operating conditions to reach both full nitrogen removal from urine and high biomass productivity. In addition, the possibility to work under day/night cycling was tested. To this end, the microalga Chlorella sorokiniana was grown on artificial urine and real human urine in bench-scale panel photobioreactors with short optical paths. At a light intensity of 1530 μmol⋅ m−2⋅s-1 photobioreactor productivity and photosynthetic efficiency was demonstrated to be maximal at reactor dilution rates between 0.10 and 0.15 h-1. A biomass yield of 1 g dry matter per mol of PAR photons was achieved. Biomass concentration, and accordingly nutrient removal efficiency, decreased at increasing reactor dilution rate. The experimental results could be reproduced by model simulations. These simulations allowed to demonstrate that the system must be operated at a dilution rate of less than 0.01 h-1 in order to reach complete nitrogen removal. In that scenario more than half of the potential biomass productivity is lost due to severe self-shading within the algal culture. Experiments with real human urine illustrated the problem of incomplete nitrogen removal and ammonium inhibition of growth at too high dilution rates. It is therefore suggested to apply an optimized pre-dilution of pure urine prior to treatment in a photobioreactor. Experiments under day-night cycles demonstrated that microalgal cultures quickly acclimate to such variable light conditions. Additional model simulations illustrated that a phototrophic system is most effective when diluted urine is fed to the photobioreactor during day time only. In that situation the lowest nitrogen concentration in the effluent can be reached at a maximal areal removal rate and photosynthetic efficiency.