Photobiological production of H2 by cyanobacteria is considered to be an ideal source of renewable energy because the inputs, water and sunlight, are abundant. The products of photobiological systems are H2 and O2; the H2 can be used as the energy source of fuel cells, etc., which generate electricity at high efficiencies and minimal pollution, as the waste product is H2O. Overall, production of commercially viable algal fuels in any form, including biomass and biodiesel, is challenging, and the very few systems that are operational have yet to be evaluated. In this paper we will: briefly review some of the necessary conditions for economical production, summarize the reports of photobiological H2 production by cyanobacteria, present our schemes for future production, and discuss the necessity for further progress in the research needed to achieve commercially viable large-scale H2 production.