Microalgae biomass is a promising feedstock with several benefits over conventional sources for manufacturing bioethanol. Given the depletion of fossil fuel stocks and environmental concerns, this third-generation biofuel is an appealing substitute because of its high productivity and low land consumption. Microalgae can produce much more biomass per unit area than terrestrial crops, making them attractive for biofuel production. However, challenges remain in optimizing production processes and economic viability. The high costs associated with harvesting and processing microalgae can limit commercial scalability, and effective fermentation processes and biomass hydrolysis are critical for maximizing ethanol output. Strategies such as synthetic biology, nanotechnology, omics technologies and genetic editing, bubble generation, photobioreactor designs, electro−/magnetic−/bioflocculation, and artificial intelligence integration in microalgal production are being explored to overcome these constraints. These strategies have significant promise in improving the production of microalgae. While microalgae offer a sustainable alternative to bioethanol, ongoing research is essential to address economic and technical challenges, ensuring their viability as a mainstream biofuel source. So, microalgal bioethanol technologies have not advanced sufficiently, but expectations for the near future are strong.