Microalgae account for most of the biologically sequestered trace metals in aquatic environments. Their ability to adsorb and metabolize trace metals is associated with their large surface:volume ratios, the presence of high-affinity, metal-binding groups on their cell surfaces, and efficient metal uptake and storage systems. Microalgae may bind up to 10% of their biomass as metals. In addition to essential trace metals required for metabolism, microalgae can efficiently sequester toxic heavy metals. Toxic heavy metals often compete with essential trace metals for binding to and uptake into cells. Recently, transgenic approaches have been developed to further enhance the heavy metal specificity and binding capacity of microalgae with the objective of using these microalgae for the treatment of heavy metal contaminated wastewaters and sediments. These transgenic strategies have included the over expression of enzymes whose metabolic products ameliorate the effects of heavy metal-induced stress, and the expression of high-affinity, heavy metal binding proteins on the surface and in the cytoplasm of transgenic cells. The most effective strategies have substantially reduced the toxicity of heavy metals allowing transgenic cells to grow at wild-type rates in the presence of lethal concentrations of heavy metals. In addition, the metal binding capacity of transgenic algae has been increased five-fold relative to wild-type cells. Recently, fluorescent heavy metal biosensors have been developed for expression in transgenic Chlamydomonas. These fluorescent biosensor strains can be used for the detection and quantification of bioavailable heavy metals in aquatic environments. The use of transgenic microalgae to monitor and remediate heavy metals in aquatic environments is not without risk, however. Strategies to prevent the release of live microalgae having enhanced metal binding properties are described.