Produced water (PW) is the most significant waste stream generated in the oil and gas industries. The generated PW has the potential to be a useful water source rather than waste. While a variety of technologies can be used for the treatment of PW for reuse, biological-based technologies are an effective and sustainable remediation method. Specifically, microalgae, which are a cost-effective and sustainable process that use nutrients to eliminate organic pollutants from PW during the bioremediation process. In these treatment processes, microalgae grow in PW free of charge, eliminate pollutants, and generate clean water that can be recycled and reused. This helps to reduce CO2 levels in the atmosphere while simultaneously producing biofuels, other useful chemicals, and added-value products. As such, this review focuses on PW generation in the oil and gas industry, PW characteristics, and examines the available technologies that can be used for PW remediation, with specific attention to algal-based technologies. In addition, the various aspects of algae growth and cultivation in PW, the effect of growth conditions, water quality parameters, and the corresponding treatment performance are presented. Lastly, this review emphasizes the bioremediation of PW using algae and highlights how to harvest algae that can be processed to generate biofuels for added-value products as a sustainable approach.