Despite receiving increasing attention during the last few decades, the production of microalgal biofuels is not yet sufficiently cost-effective to compete with that of petroleum-based conventional fuels. Among the steps required for the production of microalgal biofuels, the harvest of the microalgal biomass and the extraction of lipids from microalgae are two of the most expensive. In this review article, we surveyed a substantial amount of previous work in microalgal harvesting and lipid extraction to highlight recent progress in these areas. We also discuss new developments in the biodiesel conversion technology due to the importance of the connectivity of this step with the lipid extraction process. Furthermore, we propose possible future directions for technological or process improvements that will directly affect the final production costs of microalgal biomass-based biofuels.