Isochrysis galbana is considered a promising feed for aquaculture, but high cultivation cost well as low substance yield and quality limit its application prospects. This study explored the feasibility and regulating mechanism of green tide waste Ulva prolifera for I. galbana substance production. U. prolifera hydrolysate (UPH) was prepared as an alternative substrate from 5 to 50% concentrations to culture I. galbana. Compared to the control f/2 medium, the biomass production of I. galbana added with 40% UPH reached 318.75 mg/L, which was the most effective up to 1.24-fold increase. Meanwhile, the highest pigments, lipid, protein and carbohydrate productions were observed in the 40% UPH substrate, which were around 1.17 to 1.70 times higher than that of the control, respectively. The above parameters were the lowest with the addition of 5% UPH, except for the lipid content, which was slightly higher than control. The photosynthetic activity showed that 5% UPH blocked four electron transfer sites of I. galbana, including from Quinone A (QA) to QB, from plastoquinone (PQ) to photosystem I (PSI), the oxygen evolving complex (OEC) activity on the donor side and the acceptor pool on the PSI. However, 40% UPH enhanced the electron transfer beyond QA, from PQ to PSI and the acceptor pool of PSI. The photosynthetic parameters phi Po, phi EO, PICS and PIABS, which had strong correlation with the biomass and substance accumulation of I. galbana, were found to be enhanced by 40% UPH. Changes in electron transfer regulated the photosynthetic activity and metabolism of I. galbana. Encouragingly, the production cost of cultivating I. galbana with UPH prepared from green tide waste was almost negligible compared with the f/2 medium (US$ 15.6). Therefore, the study provides a win-win strategy for obtaining cost-effective energy production as well as the resource utilization of green tide waste.