Eukaryotic algae are a very diverse group of organisms which inhabit a huge range of ecosystems from the Antarctic to deserts. They account for over half the primary productivity at the base of the food chain. In recent years studies on the lipid biochemistry of algae has shifted from experiments with a few model organisms to encompass a much larger number of, often unusual, algae. This has led to the discovery of new compounds, including major membrane components, as well as the elucidation of lipid signalling pathways. A major drive in recent research have been attempts to discover genes that code for expression of the various proteins involved in the production of very long-chain polyunsaturated fatty acids such as arachidonic, eicosapentaenoic and docosahexaenoic acids. Such work is described here together with information about how environmental factors, such as light, temperature or minerals, can change algal lipid metabolism and how adaptation may take place.