The unceasing rise of greenhouse gas emission has led to global warming and climate change. Global concern on this phenomenon has put forward the microalgal-based CO2 sequestration aiming to sequester carbon back to the biosphere, ultimately reducing greenhouse effects. Microalgae have recently gained enormous attention worldwide, to be the valuable feedstock for renewable energy production, due to their high growth rates, high lipid productivities and the ability to sequester carbon. The photosynthetic process of microalgae uses atmospheric CO2 and CO2 from flue gases, to synthesize nutrients for their growth. In this review article, we will primarily discuss the efficiency of CO2 biosequestration by microalgae species, factors influencing microalgal biomass productions, microalgal cultivation systems, the potential and limitations of using flue gas for microalgal cultivation as well as the bio-refinery approach of microalgal biomass. (C) 2014 Elsevier Ltd. All rights reserved.