Fossil fuels are sharing a large portion of energy demand. Conventional energy sources emit a huge amount of greenhouse gas into the atmosphere, which creates energy and environmental challenges for the ecosystem. To fulfill the world energy demand and to support environmental as well as economic development in a sustainable way, with the utilization of technological advancement of renewable energy resources, algae are presently believed as most adaptable feedstock materials for bioenergy production. Algae has a high fixation rate of atmospheric carbon dioxide which supports to fast growth rate with high productivity per unit area in the form of renewable algal biomass. The present article aims to elaborate on the three generations of biofuels, sustainable microalgae biomass production, cultivation systems, and a wide range of growth parameters. The microalgae harvesting methods and their challenges are also discussed, with a special focus on lipid extraction methods and future r recommendations. The upstream and downstream processes of microalgae could help to harness the microalgae energy in an eco-friendly manner and will help in achieving overall sustainable development. •Microalgal biomass is a sustainable feedstock for biofuel and bioproducts.•Optimization of upstream and downstream processes enhance produces of microalgae.•Important biotic and abiotic factors of microalgae cultivation are summarized.•Critical steps of harvesting and transesterification of microalgal are discussed.•The key challenges with future recommendations of algal cultivation are briefed.