The depletion of fossil fuels and increased atmospheric CO2 levels have precipitated a global energy and environmental crisis. The cultivation of microalgae offers a viable remedy by utilizing solar energy and assimilating CO2 for biofuel production via photosynthesis. Microalgae demonstrate rapid growth in diverse environments, rendering them a dependable biomass source for large-scale biofuel generation. Furthermore, their biofuel production can be tailored through the manipulation of growth conditions or genetic engineering. This review aims to highlight the variety of biofuels produced from microalgae and the methodologies to optimize their yield. This review also explores the economic implications of algal biofuel production in both open ponds and closed photobioreactors. Various strategies for the photo-production of biohydrogen utilizing the hydrogenase enzyme from green algae are investigated. Additionally, certain microalgae species are recognized for their potential as biodiesel sources due to their high lipid content. The lipid profiles of leading oil-producing algal strains under optimal conditions are assessed. This review further examines the potential of microalgae in synthesizing petroleum-based chemicals and in generating bioethanol and biogas from algal biomass.