Abstract Although currently microalgae biomass is not considered as a sustainable feedstock for biofuel production, future developments of microalgae cultivation and harvest could make the commercial application of such fast-growing photosynthetic biomass economically and environmentally feasible. This article aims at reviewing thermochemical conversion of microalgae into bio-crude oil through pyrolysis and hydrothermal liquefaction technologies. Subsequently, possible solutions to overcome the constraints to achieve the sustainable conversion of microalgae biomass are discussed in detail. The drawbacks of bio-crude oil as a transportation fuel and the technologies required for its upgrading are highlighted. Currently, microalgae-derived bio-crude oil is inferior to biodiesel and diesel in terms of quality, thus cannot be used as a transportation or jet fuel. It requires catalytic upgrading steps and further processing, including durable and cost-effective catalysts with strong regenerative capabilities.