Microalgae hold great promises as sustainable cellular factories for the production of alternative fuels, feeds, and biopharmaceuticals for human health. While the biorefinery approach for fuels along with the coproduction of high-value compounds with industrial, therapeutic, or nutraceutical applications have the potential to make algal biofuels more economically viable, a number of challenges continue to hamper algal production systems at all levels. One such hurdle includes the metabolic trade-off often observed between the increased yields of desired products, such as triacylglycerols (TAG), and the growth of an organism. Initial genetic engineering strategies to improve lipid productivity in microalgae, which focused on overproducing the enzymes involved in fatty acid and TAG biosynthesis or inactivating competing carbon (C) metabolism, have seen some successes albeit at the cost of often greatly reduced biomass. Emergent approaches that aim at modifying the dynamics of entire metabolic pathways by engineering of pertinent transcription factors or signaling networks appear to have successfully achieved a balance between growth and neutral lipid accumulation. However, the biological knowledge of key signaling networks and molecular components linking these two processes is still incomplete in photosynthetic eukaryotes, making it difficult to optimize metabolic engineering strategies for microalgae. Here, we focus on nitrogen (N) starvation of the model green microalga, Chlamydomonas reinhardtii, to present the current understanding of the nutrient-dependent switch between proliferation and quiescence, and the drastic reprogramming of metabolism that results in the storage of C compounds following N starvation. We discuss the potential components mediating the transcriptional repression of cell cycle genes and the establishment of quiescence in Chlamydomonas, and highlight the importance of signaling pathways such as those governed by the target of rapamycin (TOR) and sucrose nonfermenting-related (SnRK) kinases in the coordination of metabolic status with cellular growth. A better understanding of how the cell division cycle is regulated in response to nutrient scarcity and of the signaling pathways linking cellular growth to energy and lipid homeostasis, is essential to improve the prospects of biofuels and biomass production in microalgae.