As a rapidly growing source of human nutrients, algae biosynthesize diverse metabolites which have promising bioactivities. However, the potential allergenicity of algal components hinder their widespread adoption. This review provides a comprehensive review of various macro and micronutrients derived from algal biomass, with particular focus on bioactive compounds, including peptides, polyphenols, carotenoids, omega-3 fatty acids and phycocyanins. The approaches used to produce algal bioactive compounds and their health benefits (antioxidant, antidiabetic, cardioprotective, anti-inflammatory and immunomodulatory) are summarised. This review particularly focuses on the state-of-the-art of precision fermentation, encapsulation, cold plasma, high-pressure processing, pulsed electric field, and subcritical water to reduce the allergenicity of algal compounds while increasing their bioactivity and bioavailability. By providing insights into current challenges of algae-derived compounds and opportunities for advancement, this review contributes to the ongoing discourse on maximizing their application potential in the food nutraceuticals, and pharmaceuticals industries.
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