AbstractAccording to the report of the renewable energy policy network for the 21st century published in 2014, biodiesel and bioethanol are the most used biofuels and are responsible for transportation worldwide. Biodiesel specially has shown an increase in production globally by 15 times by volume from 2002 to 2012. Promising feedstock of biodiesel are cyanobacteria and microalgae as they possess a shorter cultivation time (4 fold lesser) and high oil content (10 fold higher) than corn, jatropha and soybean (conventional oil-producing territorial plants). Various valuable natural chemicals are also produced from these organisms including food supplements such as docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA), pigments, and vitamins. Additionally, cellular components of microalgae and cyanobacteria are connected with therapeutic characteristics such as anti-inflammatory, antioxidant, antiviral and immune stimulating. Commercialization of algal biodiesel (or other products) can be achieved by isolating and identifying the high-yielding strains that possess a faster growth rate. Indigenous strains can be genetically engineered into high-yielding transgenic strains. The present article discusses about the use of nanotechnology and genetic engineering approach for improved lipid accumulation in microalgae for biodiesel production.