Abstract Background With increased availability of de novo assembly algorithms, it is feasible to study entire transcriptomes of non-model organisms. While algorithms are available that are specifically designed for performing transcriptome assembly from high-throughput sequencing data, they are very memory-intensive, limiting their applications to small data sets with few libraries. Results We develop a transcriptome assembly algorithm that recovers alternatively spliced isoforms and expression levels while utilizing as many RNA-Seq libraries as possible that contain hundreds of gigabases of data. New techniques are developed so that computations can be performed on a computing cluster with moderate amount of physical memory. Conclusions Our strategy minimizes memory consumption while simultaneously obtaining comparable or improved accuracy over existing algorithms. It provides support for incremental updates of assemblies when new libraries become available.