Microalgae have presented themselves as a strong candidate to replace diminishing oil reserves as a source of lipids for biofuels. Here we describe successful modifications of terrestrial plant lipid content which increase overall lipid production or shift the balance of lipid production towards lipid varieties more useful for biofuel production. Our discussion ranges from the biosynthetic pathways and rate limiting steps of triacylglycerol formation to enzymes required for the formation of triacylglycerol containing exotic lipids. Secondarily, we discuss techniques for genetic engineering and modification of various microalgae which can be combined with insights gained from research in higher plants to aid in the creation of production strains of microalgae.