Photosynthetic microorganisms are important bioresources for producing desirable and environmentally benign products, and photobioreactors (PBRs) play important roles in these processes. Designing PBRs for photocatalysis is still challenging at present, and most reactors are designed and scaled up using semi-empirical approaches. No appropriate types of PBRs are available for mass cultivation due to the reactors’ high capital and operating costs and short lifespan, which are mainly due to a current lack of deep understanding of the coupling of light, hydrodynamics, mass transfer, and cell growth in efficient reactor design. This review provides a critical overview of the key parameters that influence the performance of the PBRs, including light, mixing, mass transfer, temperature, pH, and capital and operating costs. The lifespan and the costs of cleaning and temperature control are also emphasized for commercial exploitation. Four types of PBRs—tubular, plastic bag, column airlift, and flat-panel airlift reactors are recommended for large-scale operations. In addition, this paper elaborates the modeling of PBRs using the tools of computational fluid dynamics for rational design. It also analyzes the difficulties in the numerical simulation, and presents the prospect for mechanism-based models.