The two major bottlenecks faced during microalgal biofuel production are, (a) higher medium cost for algal cultivation, and (b) cost-intensive and time consuming oil extraction techniques. In an effort to address these issues in the large scale set-ups, this comprehensive review article has been systematically designed and drafted to critically analyze the recent scientific reports that demonstrate the feasibility of microalgae cultivation using wastewaters in outdoor raceway ponds in the first part of the manuscript. The second part describes the possibility of bio-crude oil production directly from wet algal biomass, bypassing the energy intensive and time consuming processes like dewatering, drying and solvents utilization for biodiesel production. It is already known that microalgal drying can alone account for ∼30% of the total production costs of algal biomass to biodiesel. Therefore, this article focuses on bio-crude oil production using the hydrothermal liquefaction (HTL) process that converts the wet microalgal biomass directly to bio-crude in a rapid time period. The main product of the process, i.e., bio-crude oil comprises of C16-C20 hydrocarbons with a reported yield of 50–65 (wt%). Besides elucidating the unique advantages of the HTL technique for the large scale biomass processing, this review article also highlights the major challenges of HTL process such as update, and purification of HTL derived bio-crude oil with special emphasis on deoxygenation, and denitrogenation problems. This state of art review article is a pragmatic analysis of several published reports related to algal crude-oil production using HTL technique and a guide towards a new approach through collaboration of industrial wastewater bioremediation with rapid one-step bio-crude oil production from chlorophycean microalgae.