Nanoparticles are becoming integral components in every sector considering their unmatched properties with their counter bulk material. However, in the last couple of decades, several reports suggested metal nanoparticles are toxic to biological systems either directly or indirectly. Zinc oxide nanoparticles (ZnO NPs) possess excellent optical, electrical, food packaging properties, etc. Although, the use of chemically toxic reducing agents for the synthesis of ZnO NPs induces toxicity. Therefore, biogenic synthesis of ZnO NPs has been exploited using different sources such as plant leaves, stems, fungi algae, etc NPs synthesised via these methods are biodegradable, biocompatible, low toxic, and highly effective in different applications. Algae being widely available and easy to harvest becomes a suitable candidate for ZnO NPs synthesis. Algae mediated/phycosynthesis is a technique where algae accumulate zinc oxides and reduce them to zinc ions to form ZnO NPs. The ease of synthesis of ZnO NPs using this method produces NPs in abundant quantity and of variable sizes. Intracellular and extracellular syntheses are two mechanisms of phycosynthesis of ZnO NPs. These ZnO NPs have several beneficial properties like antimicrobial, anti-cancerous, antioxidant, larvicidal, antidiabetic, etc. Additionally, it has low scale-up cost, and low energy input. This article provides detailed information about the routes of phycosynthesis of ZnO NPs using different algal strains, properties, and their potential application in the biomedical field and environmental remediation.