Microalgae represent a carbon-neutral source of bulk biomass, for extraction of high-value compounds and production of renewable fuels. Due to their high metabolic activity and reproduction rates, species of the genus Chlorella are highly productive when cultivated in photobioreactors. However, wild-type strains show biological limitations making algal bioproducts expensive compared to those extracted from other feedstocks. Such constraints include inhomogeneous light distribution due to high optical density of the culture, and photoinhibition of the surface-exposed cells. Thus, the domestication of algal strains for industry makes it increasingly important to select traits aimed at enhancing light-use efficiency while withstanding excess light stress. Carotenoids have a crucial role in protecting against photooxidative damage and, thus, represent a promising target for algal domestication. We applied chemical mutagenesis to Chlorella vulgaris and selected for enhanced tolerance to the carotenoid biosynthesis inhibitor norflurazon. The NFR (norflurazon-resistant) strains showed an increased carotenoid pool size and enhanced tolerance towards photooxidative stress. Growth under excess light revealed an improved carbon assimilation rate of NFR strains with respect to WT. We conclude that domestication of Chlorella vulgaris, by optimizing both carotenoid/chlorophyll ratio and resistance to photooxidative stress, boosted light-to-biomass conversion efficiency under high light conditions typical of photobioreactors. Comparison with strains previously reported for enhanced tolerance to singlet oxygen, reveals that ROS resistance in Chlorella is promoted by at least two independent mechanisms, only one of which is carotenoid-dependent.