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Microalgae represent a sustainable energy source because of their high biomass productivity and ability to remove air and water born pollutants. This paper reviews the current status of production and conversion of microalgae, including the advantages of microalgae biodiesel, high density cultivation of microalgae, high-lipid content microalgae selection and metabolic control, and innovative harvesting and processing technologies. The key barriers to commercial production of microalgae biodiesel and future perspective of the technologies are also discussed.