Hydrothermal hydrolysis is an energy-efficient and economical pretreatment technology to disrupt the algal cells and hydrolyze the intracellular compounds, thereby promoting the biofuels production of fermentation. However, complex reaction mechanisms, unpredictable rheological properties of algal slurry, and immature continuous reactors still constrain the commercialization of such a process. To systematically understand the existing status and lay a foundation for promoting the technology, the chemical mechanism of hydrothermal hydrolysis of algal biomass is elaborated in this paper, and the influences of temperature, residence time, total solid content, and pH, on the biomethane production of hydrolyzed algal biomass are summarized. Besides, a comprehensive overview of the rheological behavior of algal slurries is discussed at various operational factors. The recent advances in flow, heat and mass transfer model coupling with the generic kinetics model in continuous reactors and the application of energy-saving strategies for efficient algal biomass pretreatment are detailed reviewed.