The threatening crisis of climate change and pollution resulting from various anthropogenic interventions has attracted worldwide attention over the last few decades. However, carbon capture and storage (CCS) methods, once seen as a promising technology to mitigate this worrying scenario, are considered economically cumbersome, and their long term environmental implications are still unclear. Alternatively, biological capture of carbon dioxide (CO2) using microalgae is considered an attractive medium for recycling the excess CO2 generated from power plants, automobiles, volcanic eruptions, decomposition of organic matter, and forest fires. Furthermore, through microalgae, CO2 can be captured and recycled into biomass, which in turn could be utilized as a carbon source to produce lipids for the production of bioenergy and other value-added products. In the future, these products are expected to sustainably replace petroleum-derived transport fuel without affecting the food supply chain and crops directly or indirectly. This review focuses on existing literature for biological capture via microalgae to minimize carbon footprint. It also highlights the molecular tools, methodologies and microalgae species currently utilized for CO2 capture.