Recently, microalgal biotechnology has received increasing interests in producing valuable, sustainable and environmentally friendly bioproducts. The development of economically viable production processes entails resolving certain limitations of microalgal biotechnology, and fast evolving genetic engineering technologies have emerged as new tools to overcome these limitations. This review provides a synopsis of recent progress, current trends and emerging approaches of genetic engineering of microalgae for commercial applications, including production of pharmaceutical protein, lipid, carotenoids and biohydrogen, etc. Photochemistry improvement in microalgae and CO₂ sequestration by microalgae via genetic engineering were also discussed since these subjects are closely entangled with commercial production of the above mentioned products. Although genetic engineering of microalgae is proved to be very effective in boosting performance of production in laboratory conditions, only limited success was achieved to be applicable to industry so far. With genetic engineering technologies advancing rapidly and intensive investigations going on, more bioproducts are expected to be produced by genetically modified microalgae and even much more to be prospected.