Depleting fossil fuel, soaring prices, growing demand, and global climate change concerns have driven the research for finding an alternative source of sustainable fuel. Microalgae have emerged as a potential feedstock for biofuel production as many strains accumulate higher amounts of lipid, with faster biomass growth and higher photosynthetic yield than their land plant counterparts. In addition to this, microalgae can be cultured without needing agricultural land or ecological landscapes and offer opportunities for mitigating global climate change, allowing waste water treatment and carbon dioxide sequestration. Despite these benefits, microalgae pose many challenges, including low lipid yield under limiting growth conditions and slow growth in high lipid content strains. Biotechnological interventions can make major advances in strain improvement for the commercial scale production of biofuel. We discuss various strategies, including efficient transformation toolbox, to increase lipid accumulation and its quality through the regulation of key enzymes involved in lipid production, by blocking the competing pathways, pyramiding genes, enabling high cell biomass under nutrient-deprived conditions and other environmental stresses, and controlling the upstream regulators of targets, the transcription factors, and microRNAs. We highlight the opportunities emerging from the current progress in the application of genome editing in microalgae for accelerating the strain improvement program.