Microalgae feedstock is recognised as one of the most promising resources for producing triglycerides which is subsequently converted to biodiesel. However, the large-scale technology required to generate biodiesel from microalgae is still in its early stages of development. Microalgae research to date may be placed into four broad categories: (i) growth, (ii) harvesting, (iii) oil extraction and (iv) fuel properties for engine performance and emissions. More than 1000 manuscripts have been published on the first category with progressively less on subsequent groups. Finally, effects of microalgae methyl esters on engine performance have only been reported in 9 scientific articles. This review will place extraction techniques and engine performance of microalgae biodiesel in the context of the preceding two categories and examine the practical problems associated with fuel properties, engine performance and emissions. Considering energy consumption, toxicity, and time, many of the extraction techniques used in the laboratory show moderate potential for commercial scale. An important finding is that variation of conditions in the first three categories can have a significant effect on biofuel quality which can cause fuel properties to be out of standard and/or adversely affect engine performance and emissions.