Biobutanol is gaining more attention as a potential alternative to ethanol, and the demand for fermentative biobutanol production has renewed interest. The main challenge faced in biobutanol production is the availability of feedstock. Using conventional agricultural biomass as feedstock is controversial and less efficient, while microalgae, the third generation feedstock, are considered promising feedstock for biobutanol production due to their high growth rate and high carbohydrates content. This review is primarily focused on biobutanol production by using carbohydrate-rich microalgal feedstock. Key technologies and challenges involved in producing butanol from microalgae are discussed in detail and future directions are also presented.