Biological CO2 capture using microalgae is a promising new method for reducing CO2 emission of coal-fired flue gas. The strain of microalgae used in this process plays a vital role in determining the rate of CO2 fixation and characteristics of biomass production. High requirements are put forward for algae strains due to high CO2 concentration and diverse pollutants in flue gas. CO2 can directly diffuse into the cytoplasm of cells by extra- and intracellular CO2 osmotic pressure under high CO2 concentrations. The flue gas pollutants, such as SOx, NOx and fly ashes, have negative effects on the growth of microalgae. This work reviewed the state-of-the-art advances on microalgae strains used for CO2 fixation, focusing on the modification and improvement of strains that are used for coal-fired flue gas. Methods such as genetic engineering, random mutagenesis, and adaptive evolution have the potential to facilitate photosynthesis, improve growth rate and reduce CO2 emission.