Microbial biosynthesis using yeast species offers numerous advantages to produce industrially relevant biofuels and biochemicals. Conventional metabolic engineering approaches in yeast focus on biosynthetic pathways in the cytoplasm, but these approaches are disturbed by various undesired factors including metabolic crosstalk, competing pathways and insufficient precursors. Given that eukaryotic cells contain subcellular organelles with distinct physicochemical properties, an emerging strategy to overcome cytosolic pathway engineering bottlenecks is through repurposing these organelles as specialized microbial cell factories for enhanced production of valuable chemicals. Here, we review recent progress and significant outcomes of harnessing organelle engineering for biofuels and biochemicals production in both conventional and non-conventional yeasts. We highlight key engineering strategies for the compartmentalization of biosynthetic pathways within specific organelles such as mitochondria, peroxisomes, and endoplasmic reticulum; involved in engineering of signal peptide, cofactor and energy enhancement, organelle biogenesis and dual subcellular engineering. Finally, we discuss the potential and challenges of organelle engineering for future studies and propose an automated pipeline to fully exploit this approach.