Biofuel production by oleaginous microalgae is a promising alternative to the conventional fossil fuels. Many microalgae species have been investigated and deemed as potential renewable sources for the production of biofuel, biogas, food supplements and other products. Oleaginous microalgae, named for their ability to produce oil, are reported to store 30–70% of lipid content due to its metabolic properties under nutrient starvation conditions. This review presents the assortment of the research studies focused on biofuel production from oleaginous microalgae. The new methods and technologies developed for oleaginous microalgae cultivation to improve their biomass content and lipid accumulation capacity were reviewed. The production of renewable, carbon neutral, bio-based or microalgae-based transport fuels are necessary for environmental protection and economic sustainability. Microalgae are a significant source of renewable biodiesel because of their ability to produce oils in the presence of sunlight more efficiently than that of crop oils. This review will provide the background to understanding the bottlenecks and the need for improvement in the cultivation or harvesting process for oleaginous microalgae.