Abstract: Harmful algal blooms (HABs) continue to affect lakes and waterways across the nation, often resulting in environmental and economic damage at regional scales. The US Army Engineer Research and Development Center (ERDC) and collaborators have continued research on the Harmful Algal Bloom Interception, Treatment, and Transformation System (HABITATS) project to develop a rapidly deployable and scalable system for mitigating large HABs. The second year of the project focused on optimization research, including (1) development of a new organic flocculant formulation for neutralization and flotation of algal cells; (2) testing and initial optimization of a new, high-throughput biomass dewatering system with low power requirements; (3) development, design, assembly, and initial testing of the first shipboard HABITATS prototype; (4) execution of two field pilot studies of interception and treatment systems in coordination with the Florida Department of Environmental Protection and New York State Department of Environmental Conservation; (5) conversion of algal biomass into biocrude fuel at pilot scale with a 33% increase in yield compared to the previous bench scale continuous-flow reactor studies; and (6) refinement of a scalability analysis and optimization model to guide the future development of full-scale prototypes.