-This review presents the state-of-the-art of benthic soft-bodied algae as biondicators of stream and river water quality, with emphasis on bioassessments set by the legislation (e.g., European Water Framework Directive, USA Clean Water Act) to promote the restoration and ensure ecological sustainability of water resources. The advantages and shortcomings of a variety of bioassessment field and laboratory methods for algae are discussed. The increasing use of soft-bodied algae in biotic indices to assess individual anthropogenic stressors, and in multimetric indices of biotic integrity to evaluate ecological condition in streams is summarized. Rapid microscopic and molecular approaches for inferring nutrient supply with heterocystous cyanobacteria and other sensitive algae are proposed. The need of better understanding of soft-bodied algae as bioindicators is discussed and suggestions are made for obtaining meaningful bioassessment information with cost-efficient efforts.