With the worldwide awareness of sustainability, biomass-derived carbon electrode materials for supercapacitors have attracted growing attention. In this research, for the first time, we explored the feasibility of making use of the carbon byproduct from hydrothermal liquefaction (HTL) of microalgae, termed herein as algae-derived carbon (ADC), to prepare sustainable carbon electrode materials for high-performance supercapacitor development. Specifically, we investigated carbon activation with a variety of activating reagents as well as N- and Fe-doping of the obtained ADC with the intention to enhance its electrochemical performance. We characterized the structure of the activated and doped ADCs using scanning electron microscope (SEM), Raman spectroscopy, Fourier transform infrared spectroscopy (FTIR), X-ray photoelectron spectroscopy (XPS), and BET surface area and pore analysis, and correlated the ADCs’ structure with their electrochemical performance as evaluated using cyclic voltammetry (CV), galvanostatic charge/discharge (GCD), impedance, and cycle stability through an assembled symmetric two-electrode cell with 1 M H2SO4 as electrolyte. It was found that the ADC that is activated using KOH (KOH-ADC) showed the best electrochemical performance, and its specific capacitance was 14.1-fold larger with respect to that of the raw ADC and reached 234.5 F/g in the GCD test at a current density of 0.5 A/g. The KOH-ADC also demonstrated excellent capacitance retention (97% after 10,000 cycles at a high current density of 10 A/g) for stable long-term operations. This research pointed out a promising direction to develop sustainable electrode materials for supercapacitors from the carbon byproduct produced after HTL processing of algae.