Recent advances in hydrothermal liquefaction (HTL) have established this biomass conversion technology as a potent tool for the effective valorization and energy densification of varied feedstocks, ranging from lignocelluloses to microalgae and organic wastes. Emphasizing its application across biomass types, this exploration delves into the evolving landscape of HTL. Microalgae, recognized as a promising feedstock, offer a rich source of biomolecules, including lipids, carbohydrates, and proteins, making them particularly attractive for biofuel production. The comprehensive review explores the biofuel products and platform chemicals obtained through HTL of microalgae, delving into biodiesel production, bio-oil composition, characteristics, and to produce high-valued by-products. Challenges and limitations, such as reactor design, scalability issues, and the impact of microalgal composition on yields, are critically analyzed. The future prospects and research directions section envision advancements in HTL technology, integration with biorefinery processes, and the exploration of hybrid approaches for enhanced biofuel production. Overall, the paper emphasizes the promising potential of HTL for wet microalgal biomass and underscores the need for continued research to overcome existing challenges and unlock further opportunities in sustainable biofuel and platform chemical production.