Continuously increasing CO2 remains one of the major environmental concerns to be addressed. Various physical, chemical, and biological means of CO2 sequestration are being tried and tested. Using microalgae for CO2 sequestration has significant advantages since elevated CO2 supports its high biomass productivity. Microalgae are considered as the best biomass producers on earth due to their high growth and productivities per unit area, no dependence on agricultural land and freshwater, and CO2 assimilation potential. Microalgae, due to their carbon concentrating mechanism (CCM), are able to survive under high CO2, utilize it, and convert it into chemical energy. The enzyme carbonic anhydrase and RuBisCO are the major components of the CCM. Moreover, CO2 sequestration and the biomass production by microalgae is the function of cultivation parameters like temperature, light intensity, pH, and mixing. Various metabolic pathways like Calvin cycle, glycolysis, TCA cycle, and protein and lipid synthesis in microalgae gets influenced through CO2 supply. Further, microalgal biomass can be utilized for the production of various high value metabolites, food and feed grade products, and fuels. CCM and its components, cultivation parameters, effect of CO2 supply on various metabolic pathways, and industrial applications of microalgae are discussed in this chapter.