Microalgae comprise a biodiverse group of photosynthetic organisms that reside in water sources and sediments. The green microalgae Chlamydomonas reinhardtii was adopted as a useful model organism for studying various physiological systems. Its ability to grow under both photosynthetic and heterotrophic conditions allows efficient growth of non-photosynthetic mutants, making Chlamydomonas a useful genetic tool to study photosynthesis. In addition, this green alga can grow as haploid or diploid cells, similar to yeast, providing a powerful genetic system. As a result, easy and efficient transformation systems have been developed for Chlamydomonas, targeting both the chloroplast and nuclear genomes. Since microalgae comprise a rich repertoire of species that offer variable advantages for biotech and biomed industries, gene transfer technologies were further developed for many microalgae to allow for the expression of foreign proteins of interest. Expressing foreign genes in the chloroplast enables the targeting of foreign DNA to specific sites by homologous recombination. Chloroplast transformation also allows for the introduction of genes encoding several enzymes from a complex pathway, possibly as an operon. Expressing foreign proteins in the chloroplast can also be achieved by introducing the target gene into the nuclear genome, with the protein product bearing a targeting signal that directs import of the transgene-product into the chloroplast, like other endogenous chloroplast proteins. Integration of foreign genes into the nuclear genome is mostly random, resulting in large variability between different clones, such that extensive screening is required. The use of different selection modalities is also described, with special emphasis on the use of herbicides and metabolic markers which are considered to be friendly to the environment, as compared to drug-resistance genes that are commonly used. Finally, despite the development of a wide range of transformation tools and approaches, expression of foreign genes in microalgae suffers from low efficiency. Thus, novel tools have appeared in recent years to deal with this problem. Finally, while C. reinhardtii was traditionally used as a model organism for the development of transformation systems and their subsequent improvement, similar technologies can be adapted for other microalgae that may have higher biotechnological value.