Algae-derived biofuels are being commercialized as an important renewable energy source. Like any new technology, conversion improvements are desired, including reductions in process complexity and better utilization of the entire microalgae feedstock. The Old Dominion Biomass Laboratory has focused on flash hydrolysis for algae biofuel production. That process involves rapidly heating a slurry of algae and water to a subcritical state. Results from small-scale bench tests are promising, but process scale-up is a challenge. Currently, there exists a pilot laboratory-scale system utilizing induction heating in order to reach controlled reaction temperatures with a reaction duration of 10 seconds or less. However, the influence of the induction heating process on the resulting reactions had not been examined. That is the focus of this work. The pilot flash hydrolysis reactor system has been simulated utilizing commercial software. The model assumed fully developed laminar slurry flow with an electromagnetic field, rate-sensitive chemical reactions, and diffusive transport of dilute species. Mesh refinement analysis, mass and energy balances, and experimental verification have been utilized to validate the model. This study has shown that industrial scale-up challenges will include sensitivity to feedstock channel size, induction coil pitch, length and excitation frequency, process residence time, and algae concentration. Furthermore, process efficiency improvement may be possible by thermal management of the rapid heating and subsequent quenching process.