Currently, the need to use renewable feedstocks for bioenergetic purposes is an urgent demand due to the depletion of fossil fuels. Microalgae have been utilized as a resilient and a cost-effective source for biofuel production since they can be cultivated using wastewater without the need for fertile soil and are characterized by a fast cell growth rate, and effective CO₂ sequestration. The additional benefit of microalgae includes a high yield of industrially important components such as pigments, lipids, carbohydrates, proteins, and secondary metabolites. The simultaneous production of these components during biofuel production in a biorefinery process makes microalgae a promising feedstock to be more economically feasible. This chapter discusses various cultivation conditions, harvesting, and biofuel production techniques. Furthermore, the cost of biofuel production could be reduced by different upstream processes by selecting the high producing strains as well as downstream processes through enhancing biofuel yields and advanced processes for converting biomass to biofuels. Processes for the production of biodiesel, extraction of lipids, transesterification, hydrothermal liquefaction, and pyrolysis will also be discussed. This chapter also highlights the challenges behind biofuel production based on algal biomass, as well as the future perspectives.