The physiology of the unicellular green alga Dunaliella salina in response to abiotic stress has been studied for several decades. Early D. salina research focused on its remarkable salinity tolerance and ability, upon exposure to various abiotic stresses, to accumulate high concentrations of $eta$-carotene and other carotenoid pigments valued highly as nutraceuticals. The simple life cycle and growth requirements of D. salina make this organism one of the large-scale commercially exploited microalgae for natural carotenoids. Recent advances in genomics and proteomics now allow investigation of abiotic stress responses at the molecular level. Detailed knowledge of isoprenoid biosynthesis mechanisms and the development of molecular tools and techniques for D. salina will allow the improvement of physiological characteristics of algal strains and the use of transgenic algae in bioreactors. Here we review D. salina isoprenoid and carotenoid biosynthesis regulation, and also the biotechnological and genetic transformation procedures developed for this alga that set the stage for its future use as a production system.