Microalgae have significant potential to form the basis of the next biofuel revolution. They have high growth and solar energy conversion rates. Furthermore, their osmotolerance, metabolic diversity and capacity to produce large amounts of lipids have attracted considerable interest. Although there are a handful of commercially successful examples of the photoautotrophic mass-culture of algae, these have focused on the production of higher value products (pigments, health-foods etc.). The technical and commercial challenges to develop an economically viable process for biofuels are considerable and it will require much further R&D. In this paper the biological constraints, with a particular focus on strain selection are discussed.