The development of microalgal biofuels is of significant importance in advancing the energy transition, alleviating food pressure, preserving the natural environment, and addressing climate change. Numerous countries and regions across the globe have conducted extensive research and strategic planning on microalgal bioenergy, investing significant funds and manpower into this field. However, the microalgae biofuel industry has faced a downturn due to the constraints of high costs. In the past decade, with the development of new strains, technologies, and equipment, the feasibility of large-scale production of microalgae biofuel should be re-evaluated. Here, we have gathered research results from the past decade regarding microalgae biofuel production, providing insights into the opportunities and challenges faced by this industry from the perspectives of microalgae selection, modification, and cultivation. In this review, we suggest that highly adaptable microalgae are the preferred choice for large-scale biofuel production, especially strains that can utilize high concentrations of inorganic carbon sources and possess stress resistance. The use of omics technologies and genetic editing has greatly enhanced lipid accumulation in microalgae. However, the associated risks have constrained the feasibility of large-scale outdoor cultivation. Therefore, the relatively controllable cultivation method of photobioreactors (PBRs) has made it the mainstream approach for microalgae biofuel production. Moreover, adjusting the performance and parameters of PBRs can also enhance lipid accumulation in microalgae. In the future, given the relentless escalation in demand for sustainable energy sources, microalgae biofuels should be deemed a pivotal constituent of national energy planning, particularly in the case of China. The advancement of synthetic biology helps reduce the risks associated with genetically modified (GM) microalgae and enhances the economic viability of their biofuel production.