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Hydrogen is an environmentally friendly biofuel which, if widely used, could reduce atmospheric carbon dioxide emissions. The main barrier to the widespread use of hydrogen for power generation is the lack of technologically feasible and—more importantly—cost-effective methods of production and storage. So far, hydrogen has been produced using thermochemical methods (such as gasification, pyrolysis or water electrolysis) and biological methods (most of which involve anaerobic digestion and photofermentation), with conventional fuels, waste or dedicated crop biomass used as a feedstock. Microalgae possess very high photosynthetic efficiency, can rapidly build biomass, and possess other beneficial properties, which is why they are considered to be one of the strongest contenders among biohydrogen production technologies. This review gives an account of present knowledge on microalgal hydrogen production and compares it with the other available biofuel production technologies.