The wastewater originates from different industrial, municipal, and agriculture processes and contains different nitrogen sources, for example, nitrate, ammonium, nitrite, and phosphate such as inorganic and organic sources. The discharge of high nitrate and phosphate to the ecosystem or nearby water bodies can cause eutrophication which disbalances the aquatic ecosystem.Furthermore, ingestion of these pollutants can cause severe toxicity and disease to humans and animals. Thus, from an environmental and social perspective, its treatment is essential with no negative impact on the ecosystem. Microalgae are fundamental, mixotrophic microorganisms that treat different wastewater and utilize nitrate and phosphate in the medium as a source of nutrients. Among them, Picochlorum sp., have the potential to remove nitrogen and phosphate from wastewater. The biomass produced by Picochlorum sp. can be a promising candidate as a sustainable feedstock for biofuel and bioproducts formation. Thus, the present review provides a brief knowledge and understanding about the concentration of nitrogen and phosphate in different wastewater, their negative impacts, and the uptake mechanism of microalgae. Furthermore, the review also provides an insight into Picochlorum sp., and the effects of different physiological and nutritional factors on their growth, wastewater treatment efficacy, and biomass for value-added products and biorefinery applications. In addition, the review is useful to understand the potential of Picochlorum sp. for a tenable wastewater treatment process.