Energy is the main driving force of society today that should be handled as a whole starting from production to consumption. With the rapid increase in the energy necessity, alternative methods and sources are becoming a crucial topic that should be scientifically highlighted with all their pros and cons. Especially the problems related to the fossil sources of energy triggered the search on the renewable alternatives like algae. In order to reach the desired amounts of energy with the satisfactory quality and quantity, understanding the algae as a living thing with the biological mechanism and existing production technologies are the key points to have a projection for commercialization. In this regard, technical facts and challenges on algal biofuel production should be evaluated. Keeping in mind the specifications and possible advantages related to their taxonomy, algae can serve as a promising source to reduce fossil fuel consumption. With the progress in the modern technology, reaching an effective production process will be possible, and this will help the algal biofuels to prove their maturity as a sustainable source for future. Within this context, the aim of this review is to point out the crucial technical challenges about algal fuels comprising both the macroalgae and microalgae as a reliable source of renewable energy. Copyright (C) 2016 John Wiley & Sons, Ltd.