Algae are a sustainable, nutrient-rich resource with growing potential in food biotechnology. Their ability to thrive in diverse environments makes them a promising alternative to conventional crops. Rich in proteins, essential fatty acids, and bioactive compounds, algae support the development of functional foods, including plant-based meat and seafood alternatives. Advances in synthetic biology and fermentation have enhanced algal nutrient profiles and enabled novel applications. Algae-derived polysaccharides, such as alginate, fucoidan, laminarin, and porphyran, exhibit prebiotic effects by modulating the gut microbiota and promoting SCFA production. Enzymatic hydrolysis efficiently produces bioactive oligosaccharides, while engineered microbial systems support scalable production. Algae also enable synbiotic food development by serving as both prebiotic substrates and probiotic carriers.