The potential of algae-based biofuels to replace petroleum fuels and mitigate greenhouse gas production through microalgal photosynthesis has long been recognized. However, currently there are no commercial algae-to-fuels technologies that can overcome techno-economic barriers and address serious sustainability concerns. Coupling microalgae cultivation with wastewater treatment is considered as one of the most promising routes to produce bio-energy and bio-based byproducts in an economically viable and environmentally friendly way. This paper critically reviews the current status of this specific niche research area covering utilization of different types of wastewaters as media for algae cultivation, microalgae selection, bioreactor type, cultivation mode, environmental factors and operational parameters as well as harvesting techniques and production of a broad spectrum of biofuels and byproducts through various conversion pathways. Future development of practical solutions to key problems and integration of advanced algae cultivation and wastewater treatment, and system analysis approach to the evaluation of economic feasibility and sustainability of wastewater-based algal biofuel production are also discussed in depth.