In the present study, metabolites of Scenedesmus dimorphus grown in protease peptone medium containing dairy wastewater were compared with metabolites of control medium and their biological activity were assessed. S. dimorphus (1.2x107 cells/ml) was grown in protease peptone medium (pH 7.0) containing 50% dairy wastewater and incubated at 20ºC with 12/12 hours Light/Dark at 15000lux intensity of light source for 28 days. After sufficient growth, the algal mat was recovered and extracted. Ethanol extract of S. dimorphus grown with 50% dairy wastewater indicated the presence of 11 bioactive compounds including two rare metabolites found at highest concentration which didn’t match with any metabolites of GCMS library. Control extract of S. dimorphus revealed presence of 6-Octadecenoic acid (Z)- (28.6%) and Octadecanoic acid, 2-hydroxy-1,3-propanedi (26.85%). These bioactive molecules have been reported for antimicrobial, antioxidant, antidiarrheal, anti-inflammatory, anticancer, analgesic, anxiolytic, and anti-larvicidal properties. Further, the S. dimorphus extract showed significant anti-diabetic activity with an IC50 value of 177.8µg/ml versus the IC50 value of 77.9µg/ml of the metformin. The extract also revealed significant antioxidant activity with IC50 value of 68.3% versus 41.2% of ascorbic acid. Hence, S. dimorphus grown on dairy wastewater act as an ideal resource for the synthesis of various bioactive metabolites with several nutraceutical applications.