In order for microalgae-based processes to reach commercial production for biofuels and high-value products such as omega-3 fatty acids, it is necessary that economic feasibility be demonstrated at the industrial scale. Therefore, process optimization is critical to ensure that the maximum yield can be achieved from the most efficient use of resources. This is particularly true for processes involving heterotrophic microalgae, which have not been studied as extensively as phototrophic microalgae. An area that has received significant conceptual praise, but little experimental validation, is that of nutrient recycling, where the waste materials from prior cultures and post-lipid extraction are reused for secondary fermentations. While the concept is very simple and could result in significant economic and environmental benefits, there are some underlying challenges that must be overcome before adoption of nutrient recycling is viable at commercial scale. Even more, adapting nutrient recycling for optimized heterotrophic cultures presents some added challenges that must be identified and addressed that have been largely unexplored to date. These challenges center on carbon and nitrogen recycling and the implications of using waste materials in conjunction with virgin nutrients for secondary cultures. The aim of this review is to provide a foundation for further understanding of nutrient recycling for microalgae cultivation. As such, we outline the current state of technology and practical challenges associated with nutrient recycling for heterotrophic microalgae on an industrial scale and give recommendations for future work.