Astaxanthin is the main natural C40 carotenoid used worldwide in the aquaculture industry. It normally occurs in red yeast Phaffia rhodozyma and green alga Haematococcus pluvialis and a variety of aquatic sea creatures, such as trout, salmon, and shrimp. Numerous biological functions reported its antioxidant and anti-inflammatory activities since astaxanthin possesses the highest oxygen radical absorbance capacity (ORAC) and is considered to be over 500 more times effective than vitamin E and other carotenoids such as lutein and lycopene. Thus, synthetic and natural sources of astaxanthin have a commanding influence on industry trends, causing a wave in the world nutraceutical market of the encapsulated product. In vitro and in vivo studies have associated astaxanthin's unique molecular features with various health benefits, including immunomodulatory, photoprotective, and antioxidant properties, providing its chemotherapeutic potential for improving stress tolerance, disease resistance, growth performance, survival, and improved egg quality in farmed fish and crustaceans without exhibiting any cytotoxic effects. Moreover, the most evident effect is the pigmentation merit, where astaxanthin is supplemented in formulated diets to ameliorate the variegation of aquatic species and eventually product quality. Hence, carotenoid astaxanthin could be used as a curative supplement for farmed fish, since it is regarded as an ecologically friendly functional feed additive in the aquaculture industry. In this review, the currently available scientific literature regarding the most significant benefits of astaxanthin is discussed, with a particular focus on potential mechanisms of action responsible for its biological activities.