Seaweed-based films have emerged as a promising solution for sustainable food packaging due to their renewable sourcing, biodegradability, and functional properties. This review provides an in-depth analysis of seaweed-based films, focusing on their properties, incorporation of essential oils, applications in food packaging, and future directions. The advantages of seaweed-based films include their renewable and abundant source, biodegradability, and favorable barrier properties. The review explores the physical and mechanical properties, barrier properties, and safety considerations of seaweed-based films. Additionally, it discusses the incorporation of essential oils into seaweed-based films and their potential benefits. Current and potential applications of seaweed-based films in food packaging, ranging from fresh produce to dairy products, are examined, along with the advantages and challenges associated with their use. A comparison with other sustainable packaging options is provided. Furthermore, the review highlights future research directions in developing seaweed-based films, such as improving mechanical properties, extending shelf life, scaling up production, reducing costs, and innovation in formulation. Overall, seaweed-based films offer a promising and sustainable alternative for food packaging, with ongoing research and development driving their advancement and potential for a more environmentally friendly packaging industry.