Carotenoids are a wide group of lipophylic isoprenoids synthesized by all photosynthetic organisms and also by some non-photosynthetic bacteria and fungi. Animals, which cannot synthesize carotenoids de novo, must include them in their diet to fulfil essential provitamin, antioxidant, or colouring requirements. Carotenoids are indispensable in light harvesting and energy transfer during photosynthesis and in the protection of the photosynthetic apparatus against photooxidative damage. In this review, we outline the factors inducing carotenoid accumulation in microalgae, the knowledge acquired on the metabolic pathways responsible for their biosynthesis, and the recent achievements in the genetic engineering of this pathway. Despite the considerable progress achieved in understanding and engineering algal carotenogenesis, many aspects remain to be elucidated. The increasing number of sequenced microalgal genomes and the data generated by high-throughput technologies will enable a better understanding of carotenoid biosynthesis in microalgae. Moreover, the growing number of industrial microalgal species genetically modified will allow the production of novel strains with enhanced carotenoid contents.