Fluctuating market price of fossil fuel and overwhelming emission of greenhouse gases to the atmosphere have resulted in climate change and have been a global concern in this decade. Hence, biodiesel has become an alternative option to fossil diesel as it is renewable and environmentally friendly. Nevertheless, this alternative fuel that is usually derived from terrestrial oil crops will cause shortage in food supply and deforestation if mass production is realized. In recent years, cultivation of aquatic microorganism (particularly microalgae) to produce biodiesel is considered as a practical solution due to their high growth rate and ability to synthesize large quantity of lipid within their cell. However, the development of energy and cost-efficiency of microalgae cultivation system are the main issues in producing renewable microalgae biodiesel. Of late, wastewater or organic compost has been used as the cultivation medium as it can provide sufficient nutrients to sustain microalgae growth. Microalgae cultivation method and system are vitally important as these factors undoubtedly affect the final microalgae biomass and lipid yield. In this review, the cultivation system of microalgae, nutrients demanded for microalgae production, cell harvesting and drying, microalgae oil extraction, and utilization of microalgae biomass for biodiesel production are introduced and discussed. It is anticipated to convey clearer perspectives in upstream and downstream processes in microalgae-derived biodiesel production. © 2017 Elsevier B.V.