Abstarct: Among the applications of using renewable energy are biofuels, which play an important role in government policies. Microalgae are an important and promising biofuel source that has a high potential for energy production. Studies show that Iran's climate is suitable for algae cultivation. The aim of the current research is to evaluate the technical and economic fuel production from algae and its potential in Iran. For this purpose, the potential of biogas production in Iran and the effective parameters in the anaerobic digestion process including temperature, PH, dynamics of bacteria population and a mixture of substrates have been investigated. Then, the method of production of gaseous and liquid fuels from microalgae and their potential measurement in Iran has been discussed. In order to measure the potential, a series of equations have been used to estimate the technical and economic evaluation. Due to the lack of accurate data, this case has been investigated in several stages. In the first stage, the technical, economic and environmental discussions of microalgae cultivation, harvesting and dewatering of algae and limitations are analyzed. In the second stage, the types of anaerobic digesters and the conditions and influencing factors in the technical and economic discussions of anaerobic digestion have been investigated. In the next steps, the production costs of methane and electricity were investigated. Multi-criteria decision analysis using hierarchical analysis method has been used to identify important criteria in the microalgae production process. These criteria are classified into two categories: main and secondary criteria; So that the main criteria include land, climate, infrastructure, water and natural resources, and sub-criteria include land slope, land use, land height, land area, soil characteristics, land cost, temperature, solar radiation, precipitation, cloud cover, carbon dioxide sources, water source, sewage, brackish water, distance to power plant, distance to fresh water source, distance to brackish water source, distance to road and type of production. After identifying the criteria, the best areas for microalgae cultivation have been ranked by multi-criteria decision analysis using MATLAB software and the best option has been determined. Also, two methods, Topsys and Electre, have been used for further checks and to ensure the correctness of the chosen option. Overall results show that methane production cost is 14.8 $/ MMBtu for open anaerobic digester. The cost of producing electricity from biogas was estimated at 13 cents per kilowatt hour. The recovery of carbon dioxide released during biogas upgrading or combustion for algae cultivation is necessary to reduce the cost of algae-derived biogas. The best area for algae cultivation in Iran in order to produce biofuel is the Caspian Sea and the Persian Gulf. Other regions, in order of priority, are Zagros Mountain, Urmia Lake, Qom Lake and Maharlo Lake.