Ulva compressa, a green tide-forming species, can adapt to hypo-salinity conditions, such as estuaries and brackish lakes. To understand the underlying molecular mechanisms of hypo-salinity stress tolerance, transcriptome-wide gene expression profiles in U. compressa were created using digital gene expression profiles. The RNA-seq data were analyzed based on the comparison of differently expressed genes involved in specific pathways under hypo-salinity and recovery conditions. The up-regulation of genes in photosynthesis and glycolysis pathways may contribute to the recovery of photosynthesis and energy metabolism, which could provide sufficient energy for the tolerance under long-term hyposaline stress. Multiple strategies, such as ion transportation and osmolytes metabolism, were performed to maintain the osmotic homeostasis. Additionally, several long noncoding RNA were differently expressed during the stress, which could play important roles in the osmotolerance. Our work will serve as an essential foundation for the understanding of the tolerance mechanism of U. compressa under the fluctuating salinity conditions.