Overuse of non-renewable fossil fuels due to the population explosion urges us to focus on renewable fuels such as bioethanol. It is a well-known fact that ethanol is useful as a blending product with common fuels such as petrol and diesel. This reduces the cost besides bringing down environmental pollution. Apart from chemical methods, bioethanol is generated from photosynthetic plants including algae, plant-based products, microbial organisms and their waste. Specifically, the production of ethanol from microalgal sources has been an attractive method in recent days. The reason behind using microalgal species is their simple structure with photosynthetic ability. In contrast, certain algal species often go disused in some regions. Hence, the production of ethanol from algal sources is one of the best waste management practices. Moreover, it is easy to improve the biomass in microalgal species by altering the physicochemical conditions such as light, pH, temperature, external supply of nutrients, vitamins, nano-sized particles, gene alterations etc., which will enhance ethanol production. In this review, the methods used for ethanol production are discussed. In addition, the factors involved in algal growth and ethanol production are emphasized. Overall, this review focuses on ethanol production from various algal species. This information will be useful for industrial-level production of ethanol and future renewable energy research.