For years, agrochemical fertilizers have been used in agriculture for crop production. However, intensive utilization of chemical fertilizers is not an ecological and environmental choice since they are destroying soil health and causing an emerging threat to agricultural production on a global scale. Under the circumstances of the increasing utilization of chemical fertilizers, cultivating microalgae to produce biofertilizers would be a wise solution since desired environmental targets will be obtained including (1) replacing chemical fertilizer while improving crop yields and soil health; (2) reducing the harvest of non-renewable elements from limited natural resources for chemical fertilizers production, and (3) mitigating negative influences of climate change through CO2 capture through microalgae cultivation. Recent improvements in microalgae-derived-biofertilizer-applied agriculture will be summarized in this review article. At last, the recent challenges of applying biofertilizers will be discussed as well as the perspective regarding the concept of circular bio-economy and sustainable development goals (SDGs). Display omitted •Microalgae-based biofertilizer is an alternative solution to sustainable agriculture.•Microalgae-based biofertilizer could enhance the crop productivity and soil quality.•CO2 capture could be solved through microalgae-based application processes.•The production cost of a large-scale biofertilizer should be considered.