The treatment of different types of wastewater by physicochemical or biological (non-microalgal) methods could often be either inefficient or energy-intensive. Microalgae are ubiquitous microscopic organisms, which thrive in water bodies that contain the necessary nutrients. Wastewaters are typically contaminated with nitrogen, phosphorus, and other trace elements, which microalgae require for their cell growth. In addition, most of the microalgae are photosynthetic in nature, and these organisms do not require an organic source for their proliferation, although some strains could utilize organics both in the presence and absence of light. Therefore, microalgal bioremediation could be integrated with existing treatment methods or adopted as the single biological method for efficiently treating wastewater. This review paper summarized the mechanisms of pollutants removal by microalgae, microalgal bioremediation potential of different types of wastewaters, the potential application of wastewater-grown microalgal biomass, existing challenges, and the future direction of microalgal application in wastewater treatment.