Microalgae are microscopic plants existing in aquatic environment. They are involved in the production of high value compounds and large scale cultures also have applications in energy production. In this work, the regulation of biomass concentration in a bioreactor is investigated by using an observer-based backstepping controller approach. The process is controlled to operate in a constant biomass concentration mode, in order to maintain the culture at a desired concentration and sustaining high biomass production levels. Combined with the backstepping controller, a nonlinear Lipschitz observer is proposed. Based on the Droop model describing the dynamic behaviour of microalgae process and the biomass measurements, the stability of the state error dynamics can be guaranteed. Finally, simulations and comparisons with PI controller are developed to show the performance of the nonlinear observer-based controller.