Increasing demand for energy and also escalating environmental pollution show that industries cannot rely on fossil fuels, and it is necessary to adopt an alternative. In recent decades, algal bioenergy has emerged as a renewable energy source in different industries. However, algal bioenergy production is costly and faces different challenges (technical and non-technical) and unknown aspects that need to be addressed. Experimental and theoretical research works have revealed that the efficiency of algal bioenergy production is influenced by several factors, including algae species, temperature, light, CO2, cultivation method, and available nutrients. Algal bioenergy production on commercial scales in cost-effective ways is the main aim of industries to compete with fossil fuels. Hence, it is vital to obtain a comprehensive knowledge of the previous findings and select a suitable pathway for future studies/activities. In the present review paper, the potential of microalgae bioenergy production, influential parameters, previous experimental and theoretical studies, and different methods for microalgae biofuel production from cultivation stage to utilization are reviewed. Moreover, this work discusses the engineering activities and economic analysis of microalgae cultivation to utilization. Useful suggestions are also made for future research investigations. The outcomes of the present work confirm that innovative engi-neering methods can overcome scale-up challenges, increase the rate of production, and decrease the cost of algae bioenergy production. Hence, there is no long way to produce cost-effective algae bioenergy on commercial scales.