Microalgae are a sustainable source for the production of biofuels and bioactive compounds. This review discusses significant research on innovative extraction techniques using dimethyl ether (DME) as a green subcritical fluid. DME, which is characterized by its low boiling point and safety as an organic solvent, exhibits remarkable properties that enable high extraction rates of various active compounds, including lipids and bioactive compounds, from high-water-content microalgae without the need for drying. In this review, the superiority of liquefied DME extraction technology for microalgae over conventional methods is discussed in detail. In addition, we elucidate the extraction mechanism of this technology and address its safety for human health and the environment. This review also covers aspects related to extraction equipment, various applications of different extraction processes, and the estimation and trend analysis of the Hansen solubility parameters. In addition, we anticipate a promising trajectory for the expansion of this technology for the extraction of various resources.