Eukaryotic microalgae are increasingly important for the sustainable production of environmental friendly, renewable biochemicals and biofuels. Recent technological advances in genomics and physiology of algae to produce industrially relevant products combined with advanced tools for genetic manipulation have enabled bioengineering of new strains of algae that heretofore had been impossible. The complexity of the eukaryotic genome (having nuclear, chloroplastic and mitochondrial genomes) provides challenges but opportunities that are not possible in prokaryotic systems. Combined with more affordable genome mapping techniques, advances in transformation and genome editing are enabling the bioengineering of a wide variety of microalgal strains that will be certain to positively impact the production of useful and renewable biomaterials and biofuels in the near future. This article reviews the current state of bioengineering eukaryotic microalgae and provides exemplary data derived from the manipulation of Auxenochlorella (Chlorella) protothecoides as illustration of the direction of the field. Additionally, the article discusses some of the rapidly developing tools for genome editing and discusses their potential impact on the bioengineering of eukaryotic microalgae.