Using algae to treat industrial effluents containing heavy metals presents an alternative to the current practice of using other biosorbents and physical and chemical methods. In this study, effluent from a leather-processing chemical industry in Ranipet, Tamil Nadu, India, was treated for the removal of heavy metals using the microalga, Chlorella vulgaris, which was isolated from the effluent itself. The objectives of this study were to (1) assess the mass balance of a model parameter, lead, in laboratory conditions and estimate the lead adsorption capabilities of the microalga and (2) conduct pilot-scale studies for the removal of heavy metals, using the microalga, from the effluent and the solid waste accumulated over the years generated by conventional treatment methods. The results of the study show that after 8 hours, Chlorella vulgaris exhibited a better adsorption capacity under sunlight compared to laboratory conditions (i.e., 30.6 mg/g dry weight vs 10.5 mg/g dry weight, respectively). Similarly, reduction of heavy metals and mass balance in pilot-scale field studies conducted in a high-rate algal pond showed that the microalga, apart from adsorption, complexation, and entrapment mechanisms, is likely to possess phycovolatilization capability probably via biotransformation processes.