BACKGROUND: Microfluidics allows manipulation of small volumes of fluids through channels with dimensions of tens to hundreds of micrometres. Microdroplet technology is a form of microfluidics in which small (10-200 µm diameter) monodisperses aqueous droplets are generated, manipulated and analysed in various ways. This multidisciplinary field provides an exciting new platform for single-cell studies of both eukaryotic microalgae and cyanobacteria, with considerable potential for enhancing algal biotechnology. METHODS: Growth of several species of microalgae has been studied in detail using microfluidics and microdroplets, and individual cells have been screened and sorted according to lipid content or ethanol production. Here we provide an overview of the devices, and the range of technological advances that are being pursued. CONCLUSIONS: Microdroplet technology is an exciting technology platform that can be used in a variety of applications, including monitoring of growth characteristics at the single-cell level and high-throughput screening of algal populations. Microdroplet platforms are being developed that will allow determination of individual cell characteristics to allow screening across a population, and thus to identify and select candidate cells for biotechnological feedstocks. As the potential of this emerging technical platform is recognized, the technology will become more accessible, so that it can soon be adopted and used by researchers, without the need for specialized prior knowledge of microfluidics or expensive equipment. The platform is amenable for use with species of both microalgae and cyanobacteria.