Microalgae have gained the attention of the scientific community, particularly lipid biochemists and microalgal biotechnologists, as a source of valuable nutritional ingredients, such as long-chain polyunsaturated fatty acids (LC-PUFA) and carotenoids, as well as precursors for biodiesel production. The field of microalgal lipids, particularly with respect to the identification of gene functions and the regulation of lipid biosynthetic pathways, is in its infancy. However, a wealth of biochemical and physiological data had been previously acquired. The last few years have witnessed substantial progress toward understanding the biochemical reactions of lipid biosynthesis in microalgae, supported by comprehensive knowledge acquired in the field of plant lipid biochemistry, as well as immense systems biology studies. Intensive investigations focusing on the biochemistry and enzymology of triacylglycerol formation in microalgal cells have already revealed some novel gene functions and cellular features, indicating that lipid metabolism in microalgae might differ in some aspects from that in higher plants. A better understanding of the remarkable diversity, complex evolutionary history and ecological distribution of microalgae would further accelerate functional genomic studies of model and non-model species and shed more light on their versatile lipid biosynthesis pathways. Recent advances in the genetic transformation as well as in genome-editing technologies, now permit the genomes of microalgae to be manipulated in order to expand their use in biotechnology. A thorough understanding of the lipid biosynthetic pathways in different groups of microalgae is a prerequisite for the genetic engineering of microalgae toward enhanced lipid production and modifications in fatty acid composition.