Significant technological, environmental, and energetic uncertainty preclude the development of microalgae biofuel systems. A life cycle assessment (LCA) model serves to evaluate the design alternatives for the sustainable production of microalgae-based fuels and commodity chemicals. An important outcome of the LCA is guidance on the necessary improvements or shifts in technology required to sustainably produce microalgae biofuels. The LCA determines design options in the processes involved in the production of algal biofuel and compares the inputs and outputs among these design options to optimize the overall system. This model is set up to easily substitute process design options and analyze the sustainability of the technology. Utilization of waste streams for algae production, including waste water and industrial off-gases, provides credits for reduced pollution and reduces associated costs. Development of biochemicals from byproducts of the system, toward establishing a biorefinery concept, will reduce waste, disperse associated impacts and add value to the system. Investigations of potential biochemicals from algae by-products and treatment of waste streams by algae, in the context of algae biomass production for biofuels are underway.