Microalgae, with their rapid growth rates, high intracellular lipid accumulation, and ability to utilize wastewater, emerge as a promising feedstock for high‐quality biodiesel production. Recent contributions in algal fuel research include breakthroughs in genetic engineering to boost lipid yields, such as CRISPR‐modified strains optimized for biofuel production. Innovative bioreactor designs are enhancing scalability and energy efficiency, while integration with waste‐to‐energy systems enables resource recovery and cost savings. Additionally, advancements in techno‐economic models are making large‐scale algal biofuel production more feasible, aided by supportive government policies and subsidies. This review provides a comprehensive analysis of recent advancements in microalgal growth techniques and biofuel production methodologies. This study aims to identify key research gaps and contribute to the optimization of biofuel production processes and the development of sustainable bioenergy solutions.