Global threats of fuel shortages in the near future and climate change due to green-house gas emissions are posing serious challenges and hence and it is imperative to explore means for sustainable ways of averting the consequences. The dual application of microalgae for phycoremediation and biomass production for sustainable biofuels production is a feasible option. The use of high rate algal ponds (HRAPs) for nutrient removal has been in existence for some decades though the technology has not been fully harnessed for wastewater treatment. Therefore this paper discusses current knowledge regarding wastewater treatment using HRAPs and microalgal biomass production techniques using wastewater streams. The biomass harvesting methods and lipid extraction protocols are discussed in detail. Finally the paper discusses biodiesel production via transesterification of the lipids and other biofuels such as biomethane and bioethanol which are described using the biorefinery approach. (C) 2010 Elsevier Ltd. All rights reserved.