This review aims to provide an informative summary of studies on extraction and nanoencapsulation of phlorotannins to improve their bioavailability and bioactivity. The origin, structure, and different types of phlorotannins were briefly discussed, and the extraction/purification/characterization methods for phlorotannins were reviewed, with a focus on techniques to improve the bioactivities and bioavailability of phlorotannins via nano-sized delivery systems. Phlorotannins are promising natural polyphenol compounds that have displayed high bioactivities in several areas: anticancer, anti-inflammation, anti-HIV, antidiabetic, and antioxidant. This review aims to provide a useful reference for researchers working on developing better utilization strategies for phlorotannins as pharmaceuticals, therapeuticals, and functional food supplements.