With the growing world population, there is a need for new sources of sustainable protein, carbohydrates, and lipid supplementation to overcome the significant challenges of global food security. In this context, the versatile nature of algae could offer a sustainable alternative to food production and the traditional food supply chain. In recent years, consumers have demonstrated a growing interest in functional foods combined with an increasing demand for algae-based food products. However, several challenges must be addressed, including high production costs, low consumer acceptance, safety concerns, and regulatory barriers. Furthermore, commercialization strategies and market integration are critical to enable widespread adoption. Joint effort from higher authorities is essential in curbing these challenges to foster unlocking the potential for the success of the exploration of algae development in food industries. This review comprehensively addresses the current status, technological advancements, challenges, regulatory considerations, and commercialization prospects of algae in food applications. This review laid emphasis on the fact that algae could pave the way in developing new crops that would augment the conventional agriculture system, making it more competent in meeting the world's food supply and demand.