Fossil fuel depletion and global warming are key issues to look for renewable and eco friendly sources of energy. Currently, microalgae are gaining increasing interest as a feedstock for production of bio fuels. The reasons for this are their renewability, higher photosynthesis efficiency, high lipid content, biodegradability, and non competition for farmlands and generating acceptable quality exhaust gases. This paper presents an overview of various perspectives of microalgal biofuels as a renewable source of energy.