The world population is ever increasing and so is the need to ensure food security. Food production needs to increase by about 70% within the next 40 years to cater for food consumption. Moreover, with increasing collective consciousness toward food supplementation for improving quality of health, the development of nutraceuticals has gained prominence in disease prevention, treatment, and overall health improvement. However, due to the constant controversial debate of food production for consumption against other uses, the search for better alternatives led to microalgae. Species such as Spirulina, Chlorella, Scenedesmus, and Dunaliella, among many others, are important sources of primary and secondary metabolites that play crucial roles in disease prevention and treatment. Understanding the significance of nutraceuticals and how microalgae can be used to produce those value-added molecules is necessary for any potential commercial exploitation. This review discusses the potential of microalgae to be exploited as promising sources of nutraceuticals. Here, essential biomolecules used as nutraceuticals are explored and their crucial roles in disease prevention, especially cancer, cardiovascular diseases, and strengthening the immune system. The composition of microalgae, which makes them suitable candidates to produce nutraceuticals, is discussed. Furthermore, the multifarious aspects of microalgae cultivation, in terms of cultivation systems and factors affecting biomass production and productivity regarding nutraceutical production, are reviewed. The multiple sustainable facets of microalgae culture, which can help in carbon sequestration, fast biomass production, and boosting health benefits, should interest stakeholders and potential commercial producers. Bioprocessing of microalgae for the extraction and purification of microalgae-based products is also reviewed, focusing on the key methods of pre-treatment, extraction, and purification of microalgal biomass.