Algae have long been exploited commercially and industrially as food, feed, additives, cosmetics, pharmaceuticals, and fertilizer, but now the trend is shifting towards the algae-mediated green synthesis of nanoparticles (NPs). This trend is increasing day by day, as algae are a rich source of secondary metabolites, easy to cultivate, have fast growth, and are scalable. In recent era, green synthesis of NPs has gained widespread attention as a safe, simple, sustainable, cost-effective, and eco-friendly protocol. The secondary metabolites from algae reduce, cap, and stabilize the metal precursors to form metal, metal oxide, or bimetallic NPs. The NPs synthesis could either be intracellular or extracellular depending on the location of NPs synthesis and reducing agents. Among the diverse range of algae, the most widely investigated algae for the biosynthesis of NPs documented are brown, red, blue-green, micro and macro green algae. Due to the biocompatibility, safety and unique physico-chemical properties of NPs, the algal biosynthesized NPs have also been studied for their biomedical applications, which include anti-bacterial, anti-fungal, anti-cancerous, anti-fouling, bioremediation, and biosensing activities. In this review, the rationale behind the algal-mediated biosynthesis of metallic, metallic oxide, and bimetallic NPs from various algae have been reviewed. Furthermore, an insight into the mechanism of biosynthesis of NPs from algae and their biomedical applications has been reviewed critically.