Nutritionally complete feeds are necessary to nourish fish to the desired level or form of productivity. The main applications of microalgae for aquaculture are associated with nutrition as sole component or as food additive to basic nutrients and for inducing other biological activities. Microalgae are required as live prey fed to small fish larvae. Microalgae production systems for aquaculture can be grouped in to open and closed culture systems. The technologies needed for cultivation, harvesting, and processing are considered as leading factors contributing to the high costs of producing micro-algal biomass. Although microalgae are feasible sources for hatchery feeds in general, some limitations and challenges remain, which must be overcome to upgrade the technology from pilot-phase to industrial level. A high microalgae concentrations in fish feed could reduce the growth rate and the fish weight. Open culture systems such as large open ponds, circular ponds, raceway ponds and tanks are the least expensive ones; however, issues of vulnerable species contamination, low productivity, high harvesting cost, and large volume of water loss have to be addressed. Closed culture systems are most commonly tubular and ‘big bags’ in configuration or less commonly flat panel photobioreactors. Microalgae species commonly used in aquaculture include Chlorella sp., Dunaliella sp., Spirulina sp., Tetraselmis sp., Chaetoceros sp., Arthrospira platensis, Skeletonema costatum, Thalassiosira pseudonana etc. Microalgae also contain immune-stimulants, compounds that modulate the immune system by increasing the host’s resistance against diseases that in most circumstances are caused by pathogens. The most challenging and crucial issues are enhancing microalgae growth rate and production costs, seasonal variation, microbial contamination, and low digestibility. The increasing needs for protein and high cost of fish meal has led to the need to search for new alternatives animal and plant sources of protein for aquaculture. Careful species selection and evaluation of growth in various environments are required to reduce the production cost. It should be emphasized that the productivity of any hatchery is directly related to the quantity and quality of the food source used. For microalgae to become a successful alternative to fish meal, it has to overcome number of obstacles.