Introduction Biofuel production from renewable resource has been extensively paid attention as a sustainable alternative for fossil fuel. As the feed of third-generation biofuels, microalgae can produce variety of lipids, proteins, and carbohydrates in large quantities and in a relatively short time. Regarding the compatibility of these microorganisms with culture diffrent conditions and independence from the seasons of the year, the rapid growth rate, absorbing carbon dioxide and improving air quality, renewablity, non-competing with food supplies, the existence of large quantities of lipid and carbohydrate inside their cells, and abillity of biofuels production, microalgae are known as one of the most suitable options for the biofuels production. Biofuel production from microalgae consists of several stages, including cultivation, harvesting, drying, cell disruption, extraction (lipids or carbohydrates), and the production of biofuels. Conclusion In the present study, by reviewing each stage of the biofuels production from microalgae, its importance and application for bioenergy production is discussed. Algal biofuel is not yet competitive with fossil fuels due to its high costs. Researchers are trying to produce economic algal biofuel by improving the growth of microalgae and enriching their reserves of oil and carbohydrates, creating genetic changes, improving the design of photobioreactros, developing harvesting and drying methods, improving methods of extracting lipid and carbohydrate, and producing valuable products.