Global demand for plastic materials has severely harm the environment and marine sea life. Therefore, bioplastics have emerged as an environmentally friendly alternative due to sustainability, minimal carbon footprint, less toxicity and high degradability. This review highlights the sustainable and environmentally friendly approach towards bioplastic production by utilizing microalgae as a feed source in several ways. First, the microalgae biomass obtained through the biorefinery approach can be processed into PHA under certain nutrient limitations. Additionally, microalgae biomass can act as potential filler and reinforcement towards the enhancement of bioplastic either blending with conventional bioplastic or synthetic polymer. The downstream processing of microalgae via suitable extraction and pre-treatment of bioactive compounds such as lipids and cellulose are found to be promising for the production of bioplastics. Moving on, the intermediate processing of bioplastic via lactic acid synthesized from microalgae has favoured the microwave-assisted synthesis of polylactic acid due to cost efficiency, minimum solvent usage, low energy consumption, and fast rate of reaction. Moreover, the reliability and effectiveness of microalgae-based bioplastics are further evaluated in terms of techno-economic analysis and degradation mechanism. Future improvement and recommendations are listed towards proper genetic modification of algae strains, large-scale biofilm technology, low-cost cultivation medium, and novel avocado seed-microalgae bioplastic blend.