In order to realize the resource utilization of bloom algae from Lake Chao, this study presents the use of fresh algae to improve the mechanical and biological properties of low-density polyethylene (LDPE). In this study, the algae and LDPE were used as raw materials, maleic anhydride grafted polyethylene (PE-g-MAH), polyethylene wax (PE-wax) and white oil, and glycerin were used as the compatibilizer, lubricant, and plasticizer, respectively. The single factor experiments were conducted with these three individual factors, and the response surface methodology technique was used to optimize the process conditions. In the single factor experiments, the mechanical properties of the composites increased with additions of PE-g-MAH, PE-wax/white oil, and glycerin. Both flexural strength and flexural modulus were maximized to optimize the preparation conditions. The optimum preparation conditions were found as follows: algae powder of 15.00 wt%, LDPE of 85.00 wt%, PE-g-MAH of 4.00 wt%, lubricant of 2.67 wt%, and glycerin of 3.00 wt%. This resulted in 11.60 MPa of tensile strength, 9.95 MPa of flexural strength, and 241.00 MPa of flexural modulus. The mechanical properties of composites were greatly improved compared with the absence of additives. In addition, compared with LDPE resin, the degradability of the composite was improved, and the weight loss rate was 7.73% after 6 months. The results recommended that the composites of the algae from Lake Chao and LDPE resin could be a useful material in the packaging field. Generally, the prepared composite particles can be used to produce foam products, packaging bags, or hard packing boxes with special shapes. It is more environmentally friendly, and more able to meet the challenges of sustainable development.