Microalgae are typically aquatic, photosynthetic, oxygenic autotrophs that are smaller and less structurally complex than land plants. Many microalgae have the ability to produce substantial amounts (e.g. 20–50% dry cell weight) of storage neutral lipids/oils mainly in a form of triacylglycerols (TAG). Since TAG can be converted to biofuels (such as surrogates of gasoline, kerosene and diesel), microalgae have been considered a promising alternative, renewable source of feedstock for biofuels. The advantages of algae over oil crop plants for biofuels are that algae have a considerably higher TAG production potential, are a non-food source, can utilize marginal lands and wastestreams (e.g., wastewater and CO2), thereby providing additional environmental benefits. Since the concept of microalgae-based biofuels has been explored to only a limited extent over the past few decades, a scalable, commercially viable production system and process has yet to emerge. In this presentation, an overview of the current status of research on selection of high TAG-producing microalgal strains, the synthesis and regulation of TAG and the effects of environmental and biological factors on cellular TAG accumulation will be provided. An engineered system and process to produce TAG-derived biofuels and the technical limitations associated with existing algal TAG production technologies will be described. Finally, the path forward for microalgae-based biofuels with respect to both challenges and opportunities will be discussed.