Rising oil prices and concerns over climate change have resulted in more emphasis on research into renewable biofuels from microalgae. Unlike plants, green microalgae have higher biomass productivity, will not compete with food and agriculture, and do not require fertile land for cultivation. However, microalgae biofuels currently suffer from high capital and operating costs due to low yields and costly extraction methods. Microalgae grown under optimal conditions produce large amounts of biomass but with low neutral lipid content, while microalgae grown in nutrient starvation accumulate high levels of neutral lipids but are slow growing. Producing lipids while maintaining high growth rates is vital for biofuel production because high biomass productivity increases yield per harvest volume while high lipid content decreases the cost of extraction per unit product. Therefore, there is a need for metabolic engineering of microalgae to constitutively produce high amounts of lipids without sacrificing growth. Substrate availability is a rate-limiting step in balancing growth and fatty acid (FA) production because both biomass and FA synthesis pathways compete for the same substrates, namely acetyl-CoA and NADPH. In this review, we discuss the efforts made for improving biofuel production in plants and microorganisms, the challenges faced in achieving lipid productivity, and the important role of precursor supply for FA synthesis. The main focus is placed on the enzymes which catalyzed the reactions supplying acetyl-CoA and NADPH.