Primary nonrenewable sources of energy like coal, petroleum, and natural gas are constantly depleting due to their perpetual usage in industrial and transport sectors. Besides, these fuels have emerged out as precarious category of sources of pollutants, displaying hostile effects on both human health and the dynamism of ecosystems, due to forgo of hazardous and toxic gases. Moreover, level of greenhouse gases has exponentially augmented in the post‐industrialization period by 25% of total through emission of chlorofluoro‐hydrocarbons and CO 2 . As a result, across the globe, the climate conditions have perilously transmuted and have become a matter of concern and debate. Therefore, improved fuel transformation strategies with better adeptness, eco‐friendly, and renewable nature are required to meet the energy supply demand for the ever‐growing population. Owing to all this, there is desideratum for the sustainable alternative sources of renewable energy. Diverse array of biomass from heterogeneous sources like forestry, agricultural, and aquatic systems have been considered for a variety of biofuel production, viz., bio‐hydrogen, biogas, bio‐oil, bioethanol, and biodiesel. The utilization of first‐generation biofuels obtained from oil seeds (soybean, and rapeseed) and food‐based crops (corn, and sugar molasses) are restricted due to the climate change as well as economic concerns. Second‐generation biofuels obtained from lignocellulosic biomass, municipal solid wastes, manures, agricultural and forest wastes, e.g. jatropha, cassava, poplar, and so on, are additionally delimited because of the processing and high production cost quandary. Microalgae, comprises of third‐generation biofuels, are found to be very promising in the engenderment of biofuels. Microalgae, harbor metabolic toolbox to, act as a solar‐driven energy factory for production of raw materials for biofuels. Also photosynthetic machinery of microalgae enables CO 2 sequestration from atmosphere and ergo diminishes the relinquishment of unfavorable and toxic substances in the environment. Microalgae, therefore, could be plausible keystone to provide a solution to meet global energy demand along with sustaining invulnerable and carbon‐neutral environment. This chapter fixates on the biofuels production by these minute photoautotrophs, their cultivation, harvesting, processing as well as other by‐products and the promising applications of microalgae.