Cerium is the most abundant rare earth metal in the earth's crust, and it has deleterious effects on aquatic ecosystems from fertilizer runoff. Scenedesmus obliquus is an oil-rich microalga that grows rapidly and is sensitive to many kinds of toxins. Given that microalgae are useful indicators of eutrophication and toxic stress, it was found that lower concentrations of cerium (0.50–5.00 mg·L−1) stimulated algal growth and increased chlorophyll a content, whereas higher concentrations (above 50.00 mg·L−1) had an inhibitory effect on algal growth and chlorophyll a content. The algal growth rate and chlorophyll a content peaked at a cerium concentration of 5.00 mg·L−1. Both the donor and acceptor sides of photosystem II (PSII) reaction centers were sensitive to cerium-induced stress. Specifically, high concentrations of cerium damaged the oxygen evolving complex and PSII reaction center and suppressed electron transport at the donor and receptor side of the reaction center, influencing the absorption, transfer, and application of light energy in S. obliquus XJ002. In addition, we established a simple method to quantify the intracellular lipid content of S. obliquus XJ002, and the optimum staining conditions for Nile red were as follows: volume percentage of dimethyl sulfoxide was 2%, the concentration of Nile red was 2.0 µg·mL−1, and the staining time of Nile red was 5 min. The addition of cerium resulted in a significant increase in the total lipid content of XJ002. When the concentration of cerium was 50 mg·L−1, the total lipid content was 16.26% higher than the control group. This information will enhance our ability to utilize microelement fertilizer in biomass accumulation programs and will help to further reveal the key regulatory factors in the lipid metabolism, and would lay the foundation for promoting the research of microalgae bioenergy.