Microalgae offer great potential for exploitation, including the production of biodiesel, but the process is still some way from being carbon neutral or commercially viable. Part of the problem is that there is little established background knowledge in the area. We should look both to achieve incremental steps and to increase our fundamental understanding of algae to identify potential paradigm shifts. In doing this, integration of biology and engineering will be essential. In this review we present an overview of a potential algal biofuel pipeline, and focus on recent work that tackles optimization of algal biomass production and the content of fuel molecules within the algal cell.