With the increasingly severe energy and environmental problems, biodiesel from microalgae has become a hot topic. Compared with traditional oil crops, microalgae have advantages of rapid growth, high lipid content, non-occupation of arable land, etc., which have been considered as a highly potential feedstock of biofuels. Although neutral lipids, especially triacylglycerols (TAG) which are the main feedstock of biodiesel production, can be accumulated in many algal cells under stress conditions, little is known about microalgal lipid synthesis and metabolic regulation so far. In order to better understand and manipulate microalgal lipid metabolism for improvement of lipid production, we present an overview of advances of lipid biosynthesis and metabolic regulation in microalgae, including TAG biosynthesis pathway, biochemical regulation and genetic engineering strategies. Effects of nutrition on lipid production are represented. Five genetic engineering strategies are summarized including enhancement of fatty acids synthesis pathway, enhancement of Kennedy pathway, regulation of alternative pathway of TAG, inhibition of competing pathway of lipid biosynthesis and lipid catabolism. The prospects of research on microalgal lipid metabolism are also discussed.