Abstract: There are abundant of functional lipids in the microalgae oil. The main extraction methods and its functional characteristics were gradually emphasized by researchers. This article reviewed the main extraction methods of microalgae oil (physical method, chemical method, physical-chemical method, and biological method) and both of their advantages and disadvantages. The functions of DHA, EPA and squalene in microalgae oil were described, including anti-tumor, hypolipidemic, intellectual enhancement, prevention of cardiovascular diseases, etc. The application of microalgae oil in food, medicine and aquaculture was introduced. Finally, the development trend of microalgae oil extraction technology and its functional characteristics were outlined, and the application prospect of microalgae oil was also prospected.