As a renewable energy sources to replace conventional fossil fuels, biodiesel fuels have been becoming increasingly requirements to global fuels market. Biodiesel derived from oil crops cannot realistically satisfy even more fraction of the raw material existing costs and soil competitive demand for its growth. Microalgae appear to be the advantage of costs that is capable of higher photosynthetic efficiency, larger biomass, faster growth compared to those of oil crops. Lipid content of many microalgae is usually 80% of its dry weight. Genetic microalgae with high-oil productivity by genetic manipulations are capable of making microalgal biodiesel economically competitive with petrodiesel through large-scale production of genetic microalgal biomass. As demonstrated here, the use of biodiesel fuels in home and abroad are currently introduced, and the cost advantage of microalgae as the raw material is analyzed; And moreover, the progress of microalgal genetic engineering in regulation of lipid metabolism and the problems in the construct of genetic microalgae strains as well as approaches for making microalgal biodiesel appear to be an important source of renewable fuel that has the potential to completely displace fossil diesel are discussed in this review.