Algae have recently received great attention for alternative biofuel production, CO2sequestration, and wastewater treatment. Moreover, algae have attracted much interest in the production of foods and bioactive compounds, and for their ability to clean the environment. Biofuel production from algae is generally considered one of the most environmentally and economically sustainable alternatives to fossil fuels, although such processes are not yet economical, mainly due to the influence of the photobioreactor technology on the process cost. The closed photobioreactor design is one of the greatest challenges to increasing the reactor size and quantity of biofuel production. Proficient photobioreactors are required to tap and expand the potential of algae. This review addresses the general design of photobioreactors and the use of natural light and photosynthetic growth mechanisms in large-scale reactors. The main parameters include lighting, aeration, temperature, pH, water consumption, CO2sequestration, O2elimination, and nutrient supply. Moreover, the latest advances and novel approaches in classic photobioreactor design; concepts of combining open and closed systems; novel configurations to improve their performance, including light absorption and biomass productivity; control; and photosynthetic efficiency are discussed. Although several photobioreactors have been proposed for the mass production of algae, only a few of them are practically effective. © 2017 by Nova Science Publishers, Inc. All rights reserved.