Microalgae, a sustainable and environmentally friendly alternative energy source for the industrial economy and community consumption, has come to the forefront in recent years due to the rapid depletion of oil reserves and consequent negative effects of greenhouse gases on the environment. In this study, the chemical composition of microalgae affecting the selection of biofuel production processes, factors affecting microalgae cultivation, cultivated systems, biofuel production processes and its economic analysis are examined. The content of microalgae affects the conversion processes, and the obtained biofuels from microalgae show differences. As a result of this investigation, it has been concluded that the heat and electricity production may be obtained from burning or gasification of microalgae residues. Biodiesel, bioethanol and methane can also be produced using microalgae. The full-scale applications of algae cultivation for biofuel production with existing technologies are quite expensive. To reduce algal production costs, the regional power plants or the industrial flue gas and the wastewater treatment plants should be used in an effectively and integrally.