Among the various types of biomass, microalgae have the potential of becoming a significant energy source for biofuel production in the coming years. Currently, research is mainly focusing on optimization of the cultivation methods and the conversion of just a single microalgae fraction (lipids for biodiesel production). Hydrothermal liquefaction is a method for thermochemical conversion of wet microalgae, producing a liquid energy carrier called ‘bio-oil’ or ‘biocrude’, next to gaseous, aqueous and solid by-products. A review of the available literature is presented here, analyzing the influence of parameters such as temperature, holding time and catalyst dosage on the yield and properties of the different product fractions. Also, the strain selection and the status of the technology for hydrothermal processes are analyzed. Finally, based on the findings obtained from the literature review, directions for future research are suggested.