Algae are an enormous source of polysaccharides and have gained much interest in human flourishing as organic drugs. Algal polysaccharides have aroused interest in the health sector owing to the various bioactivities namely anticancer, antiviral, immunoregulation, antidiabetic and antioxidant effects. The research community has comprehensively described the importance of algal polysaccharides regarding their extraction, purification, and potential use in various sectors. However, regardless of all the intriguing properties and potency in the health sector, these algal polysaccharides deserve detailed investigation. Hence, the present review emphasizes extensively on the previous and latest developments in the extraction, purification, structural properties and therapeutic bioactivities of algal polysaccharides to upgrade the knowledge for further advancement in this area of research. Moreover, the review also addresses the challenges, prospective research gaps and future perspective. We believe this review can provide a boost to upgrade the traditional methods of algal polysaccharide production for the development of efficacious drugs that will promote human welfare.