This review presents the chemical composition, bioactive properties, and diverse applications of Chlorella vulgaris, a green microalga widely recognized for its exceptional nutritional value and therapeutic potential. The study emphasizes the presence of key nutrients, including high-quality proteins, essential vitamins, minerals, and an array of bioactive compounds such as carotenoids, chlorophyll, and polysaccharides. These compounds have been shown to exhibit a wide spectrum of biological activities, including potent antioxidant, anti-inflammatory, immunomodulatory, antiviral, anticancer, antidiabetic, lipid-lowering, and detoxifying effects. The review explores the multifaceted applications of C. vulgaris in various sectors, including its growing role as a functional food ingredient, a nutraceutical supplement in animal feed, and a promising therapeutic agent for combatting chronic diseases. This paper also highlights its potential for enhancing immune responses, mitigating oxidative stress, promoting detoxification of heavy metals, and improving overall health outcomes. However, current limitations in clinical evidence surrounding its medicinal efficacy present challenges that need to be addressed. Furthermore, significant obstacles remain in scaling up C. vulgaris production, including optimizing cultivation techniques and improving bioavailability. Additionally, this review identifies crucial research gaps, particularly in optimizing cultivation techniques, improving bioavailability, and validating the clinical efficacy of C. vulgaris. By addressing these challenges, C. vulgaris holds significant promise in contributing to global health, sustainable nutrition, and environmental conservation efforts by serving as a source of protein and bioactive components for a growing population while simultaneously having a lower environmental impact and requiring fewer resources in production compared to traditional ingredients like soybean meal.