$CO_2$fixation by microalgae has emerged as a promising option for $CO_2$mitigation. In-tensive research work has been carried out to develop a feasible system for removing $CO_2$from industrial exhaust gases. However, there are still several challenging points to overcome in order to make the process more practical. In this paper, recent research activities on three key technologies of biological $CO_2$fixation, an identification of a suitable algal strain, development of high efficient photobioreactor and utilization of algal cells produced, are described. Finally the barriers, progress, and prospects of commercially developing a biological $CO_2$fixation process are summarized.