Algal based wastewater treatment (WWT) technologies are attracting renewed attention because they couple energy-efficient sustainable treatment with carbon capture, and reduce the carbon footprint of the process. A low-cost energy-efficient mixed microalgal culture-based pilot WWT system, coupled with carbon dioxide (CO2) sequestration, was investigated. The 21 L stirred-tank photobioreactors (STPBR) used light-emitting diodes as the light source, resulting in substantially reduced operational costs. The STPBR were operated at average optimal light intensity of 582.7 μmol.s−1.m−2, treating synthetic municipal wastewater containing approximately 250, 90 and 10 mg.L−1 of soluble chemical oxygen demand (SCOD), ammonium (NH4-N), and phosphate, respectively. The STPBR were maintained for 64 days without oxygen supplementation, but had a supply of CO2 (25 mL.min−1, 25% v/v in N2). Relatively high SCOD removal efficiency (>70%) was achieved in all STPBR. Low operational cost was achieved by eliminating the need for mechanical aeration, with microalgal photosynthesis providing all oxygenation. The STPBR achieved an energy saving of up to 95%, compared to the conventional AS system. This study demonstrates that microalgal photobioreactors can provide effective WWT and carbon capture, simultaneously, in a system with potential for scaling-up to municipal WWT plants.