Bio-oil is a liquid fuel with high energy density obtained through thermochemical processes from biomass materials, mainly from lignocellulosic biomass which is a dry waste product of several industries. Bio-oil is a promising option to replace fossil fuel for many applications because it has a high energy density, and easy to store in contrast to gaseous products, carbon neutral, biodegradable in environmentally friendly manner. Organisms have been bioprospected in the past to identify high oil producing algae and plants for the production of a sliver of the bio-oil required to suffice and replace crude. Genetic engineering or the direct manipulation of DNA can be utilized for transformation of organisms into the desired factories with high efficiency of bio-oil production. Metabolic engineering is also an emerging field of biotechnology engineering which is aimed towards modification of metabolic pathways of organisms through introduction of a gene to construct a metabolic pathway or regulation of gene expression to control the metabolic flux. In this chapter, the conventional methods for biofuel production, bio prospecting for oleaginous organisms, and emerging novel genetic and metabolic engineering strategies have been summarized for optimal and efficient techniques for the production of abundant bio-oils from waste biomass.