The industrial potential of ethanol has been tested early in 1800 to be used as an engine fuel after the invention of an internal combustion engine. Currently, there are three generations of bioethanol that have been flourished based on different feedstocks. The first-generation bioethanol is derived from fermentation of glucose contained in starch and/or sugar crops. USA and Brazil are the main producers of bioethanol worldwide utilizing corn and sugarcane, while potato, wheat, and sugar beet are the common feedstocks for bioethanol in Europe. The term “second-generation bioethanol” emerged as a boon to overcome the “food versus fuel” that occurs by the first-generation bioethanol. The second generation also referred to as “advanced biofuels” is produced by innovative processes mainly using lignocellulosic feedstock and agricultural forest residues. The emergence of the third-generation bioethanol provides more benefits as compared to the first and second generations and is focused on the use of microalgae and cyanobacteria. These organisms represent as a promising alternative feedstock due to its high lipid and carbohydrate contents, easy cultivation in a wide variety of water environment, relatively low land usage and carbon dioxide absorption. This chapter will discuss the use of microalgae for the ethanol production and the main technological routes, i.e., enzymatic hydrolysis and yeast fermentation of microalgal biomass, metabolic pathways in dark conditions, and “photofermentation.”