An understanding of photosynthesis is fundamental for microalgal biotechnology. The process of photosynthesis can be expressed as a light-driven redox reaction in which carbon dioxide is converted to carbohydrates and oxygen is released as a side-product. This chapter describes the processes in detail from light capture to carbon fixation. The main techniques for measuring and monitoring photosynthetic processes in microalgal cultures are evaluated. Finally, based on detailed knowledge, an estimate of a realistic, practically obtainable, maximum efficiency for photosynthetic solar energy conversion in microalgal cultures might reach 4-5%.