Protein is one of the major macronutrients essential in human nutrition. Protein sources especially animal sourced proteins are expensive, thus much work has been carried out to explore alternative protein sources. Seaweeds, or macroalgae, are emerging as one of the alternative protein sources. They are rich in protein with an excellent amino acid profile comparable to the other conventional protein sources. Seaweed protein contains bioactive components, such as free amino acids, peptides, lectins, and phycobiliproteins, including phycoerythrin and phycocyanin, among others. Seaweed proteins have been proved for their antihypertensive, antidiabetic, antioxidant, anti-inflammatory, antitumoral, antiviral, antimicrobial, and many other beneficial functional properties. Therefore, seaweed proteins can be a natural alternative source for functional food development. This paper discusses the compositional and nutritional aspects of seaweed protein, protein extraction techniques, functional properties of various seaweed proteins, as well as their safety for new product development and functional food applications.