Background The increasing emission of flue gas from industrial plants contributes to environmental pollution, global warming, and climate change. Microalgae have been considered excellent biological materials for flue gas removal, particularly CO2 mitigation. However, tolerance to high temperatures is also critical for outdoor microalgal mass cultivation. Therefore, flue gas- and thermo-tolerant mutants of Chlorella vulgaris ESP-31 were generated and characterized for their ability to grow under various conditions. Results In this study, we obtained two CO2- and thermo-tolerant mutants of Chlorella vulgaris ESP-31, namely, 283 and 359, with enhanced CO2 tolerance and thermo-tolerance by using N-methyl-N-nitro-N-nitrosoguanidine (NTG) mutagenesis followed by screening at high temperature and under high CO2 conditions with the w-zipper pouch selection method. The two mutants exhibited higher photosynthetic activity and biomass productivity than that of the ESP-31 wild type. More importantly, the mutants were able to grow at high temperature (40 °C) and a high concentration of simulated flue gas (25% CO2, 80–90 ppm SO2, 90–100 ppm NO) and showed higher carbohydrate and lipid contents than did the ESP-31 wild type. Conclusions The two thermo- and flue gas-tolerant mutants of Chlorella vulgaris ESP-31 were useful for CO2 mitigation from flue gas under heated conditions and for the production of carbohydrates and biodiesel directly using CO2 from flue gas.