Continual increases in the human population and growing concerns related to the energy crisis, food security, disease outbreaks, global warming, and other environmental issues require a sustainable solution from nature. One of the promising resources is cyanobacteria, also known as blue-green algae. They require simple ingredients to grow and possess a relatively simple genome. Cyanobacteria are known to produce a wide variety of bioactive compounds. In addition, cyanobacteria’s remarkable growth rate enables its potential use in a wide range of applications in the fields of bioenergy, biotechnology, natural products, medicine, agriculture, and the environment. In this review, we have summarized the potential applications of cyanobacteria in different areas of science and development, especially related to their use in producing biofuels and other valuable co-products. We have also discussed the challenges that hinder such development at an industrial level and ways to overcome such obstacles.