The culture protocol of Schizochytrium limacinum SR 21, a known docosahexaenoic acid (DHA) producing marine algae was modified in this study to better fit fermentation parameters, particularly control of dissolved oxygen (DO) to the known reproductive and growth biology of the microorganism. The cultures controlled at 50% DO saturation produced a cell density of 181 million cells/ml, whereas cultures with 10% DO produced only 98.4 million cells/ml. A fixed-agitation rate of 150 rpm resulted in an even lower density of 22.5 million cells/ml. Fifty percent DO saturation level led to a decreased pH, as well as a negative correlation with lipid accumulation, while low oxygen concentration was obligatory for lipid accumulation. This study indicated that high DO was preferred for the cells' reproduction via release of zoospores. Thus, the culture of S. limacinum SR21 should be best divided into two stages: (1) a cell-number-increasing stage in which cell reproduction and cell number increase with little increase in the size and weight of each cell; and (2) a cell-size-increasing stage in which cells stop reproduction but cell size enlarges due to lipids accumulation. With such a protocol, the production of algae biomass and DHA was improved to levels of 37.9 g/L and 6.56 g/L, respectively. The two-stage culture process could be potentially used not only for omega-3 PUFA production, but also in other single cell oil (SCO)-producing processes, including biodiesel production from algae.