In recent years, more attention has been paid to the use of third generation feedstocks for the production of biodiesel. Microalgae have emerged as one of the most promising sources for biodiesel production. They are unicellular or colonial photosynthetic organisms, with permanently increasing role in industrial application in the production. of not only chemicals and nutritional supplements, but also the biodiesel. The biodiesel productivity per hectare of cultivation area can be up to 100 times higher for microalgae than for oil crops. Also, microalgae can grow in a variety of environments that are often unsuitable for agricultural purposes. Microalgae oil content varies in different species and can reach Lip to 77% of dry biomass, while the oil productivity by the phototrophic cultivation of microalgae is up to 122 mg/l/d. Variations of the growth conditions and the implementation of the genetic engineering can induce the changes in the composition and productivity of microalgae oil. Biodiesel from microalgae can be produced in two ways: by transesterification of oil extracted from biomass or by direct transesterification of algal biomass (so called in situ transesterification). This paper reviews the curent status of microalgae used for the production of biodiesel including their isolation, cultivation, harvesting and conversion to biodiesel. Because of high Oil productivity, microalgae will play a significant role in future biodiesel production. The advantages of using microalgae as a source for biofuel production are increased efficiency and reduced cost of production. Also, microalgae do not require a lot of space for growing and do not have a negative impact on the global food and water supplies. Disadvantages of using microalgae are more difficult separation of biomass and the need for further research to develop standardized methods for microalgae cultivation and biodiesel production. Currently, microalgae are not yet sustainable option for the commercial production of biodiesel. First of all, the price of biodiesel from microalgae is still higher than the price of diesel, due to high production costs.