Arsenic is a toxic metalloid and its pollution has become a global environmental problem. This paper reviewed the current knowledge on the speciation, toxicity and metabolism of arsenic in microalgae. A number of arsenic species are present in various microalgae. Due to the great toxicity of inorganic arsenic, microalgae may undergo different processes to reduce the arsenic toxicity, including cell surface binding, arsenite [As(III)] oxidation, arsenate [As(V)] reduction, methylation, transformation into arsenosugars or arsenolipids, chelation of As(III) with glutathione and phytochelatins, as well as excretion from cells. Several genes and enzymes involved in arsenic transformations have been identified and characterized. Many factors, especially nutrient elements (e.g., nitrogen and phosphorus) in cells and in culture, affect arsenic metabolic pathways of microalgae. Arsenic metabolism in the unicellular algae has gained considerable interest because these processes control not only the effectiveness of arsenic phycoremediation, but also the risk of arsenic contamination in algal products. Future research need to focus on (1) the regulative mechanisms of arsenic absorption, biotransformation and excretion at molecular level; (2) the effects of intracellular nutrient dynamics on arsenic speciation; (3) the impacts of culture regime on the arsenic metabolism in microalgae; (4) the transfer of arsenic species across aquatic food web in order to better evaluate the roles of microalgae in arsenic cycling.