Phyco-valorization is the exploitation of microalgae and microalgal chemicals as valuable products. This paper discusses the optimization of microalgal bioreactor-based systems for C-phycocyanin pigment production. Various aspects contributing to system development and enhancement of phycocyanin productivity are described. A wide range of potential microalgal species have been identified for phycocyanin production; the selection of a species for mass culturing can be determined by desired bioreactor trophic mode and symbiotic relations. Research has demonstrated that species amenability to local lighting and climatic conditions, and to variations in bioreactor substrate concentrations and operational parameters, have significant impact on phycocyanin production. The simultaneous optimization of all factors contributing to system productivity may be accomplished efficiently through process modelling. A summary of established models for microalgal phycocyanin production is presented. A suggested strategy for increasing economic viability of phycocyanin production systems is their application in integrated resource recovery. Through the incorporation of phycocyanin productivity optimization principles within a phycoremediation process, the valorization of waste resources may be achieved. The simultaneous economic potential and environmentally-forward concept of phyco-valorization through phycocyanin production is a promising application of microalgal biotechnology awaiting further development for industrial implementation. (c) 2015 Society of Chemical Industry