The chloroplasts found in plants and algae, and photosynthetic microorganisms such as cyanobacteria, are emerging hosts for sustainable production of valuable biochemicals, using only inorganic nutrients, water, CO2 and light as inputs. In the past decade, many bioengineering efforts have focused on metabolic engineering and synthetic biology in the chloroplast or in cyanobacteria for the production of fuels, chemicals, as well as complex, high-value bioactive molecules. Biosynthesis of all these compounds can be performed in photosynthetic organelles/organisms by heterologous expression of the appropriate pathways, but this requires optimization of carbon flux and reducing power and a thorough understanding of regulatory pathways. Secretion or storage of the compounds produced can be exploited for the isolation or confinement of the desired compounds. In this review, we explore the use of chloroplasts and cyanobacteria as biosynthetic compartments and hosts, and we estimate the production levels to be expected from photosynthetic hosts in light of the fraction of electrons and carbon that can potentially be diverted from photosynthesis. The supply of reducing power, in the form of electrons derived from the photosynthetic light reactions, appears to be non-limiting, but redirection of the fixed carbon via precursor molecules presents a challenge. We also discuss the synthetic biology tools available and the need to expand the molecular toolbox to facilitate cellular reprogramming for increased production yields in both cyanobacteria and chloroplasts. This article is protected by copyright. All rights reserved.