Starch and lipids are key components of algal cells and responsible for buffering variable supplies of energy and carbon that are vital for cell growth and reproduction, particularly DNA replication, nuclear and cellular division. The basic characteristics of energy reserves, their ultrastructure and localization inside the cell, regulation of their synthesis in relation to cell cycle phases, and their control by external factors, including light intensity, temperature, and carbon dioxide are described. Over the last two decades, research in this field has been boosted by possible biotechnological applications of algae for the production of biofuels from energy conserving compounds (bioethanol from starch and biodiesel from lipids). Recent findings on mechanisms that lead to an accumulation of exceptionally high levels of starch and lipids in algae will be summarized in this review. Macroelement (N, S, P) limitation, or depletion in mineral medium, as the most widely used approaches for enhancing both starch and lipid accumulation, are reviewed in detail. Potential biotechnological strategies for the economically viable overproduction of lipid and starch, such as a two-step procedure exploiting the effects of nutrient limitation and depletion, as well as the means and rationale for selecting appropriate strains, are discussed.