Seaweed extracts are considered effective therapeutic alternatives to synthetic anticancer, antioxidant, and antimicrobial agents, owing to their availability, low cost, greater efficacy, eco-friendliness, and non-toxic nature. Since the bioactive constituents of seaweed, in particular, phytosterols, possess plenty of medicinal benefits over other conventional pharmaceutical agents, they have been extensively evaluated for many years. Fortunately, recent advances in phytosterol-based research have begun to unravel the evidence concerning these important processes and to endow the field with the understanding and identification of the potential contributions of seaweed-steroidal molecules that can be used as chemotherapeutic drugs. Despite the myriad of research interests in phytosterols, there is an immense need to fill the void with an up-to-date literature survey elucidating their biosynthesis, pharmacological effects, and other biomedical applications. Hence, in the present review, we summarize studies dealing with several types of seaweed to provide a comprehensive overview of the structural determination of several phytosterol molecules, their properties, biosynthetic pathways, and mechanisms of action, along with their health benefits, which could significantly contribute to the development of novel drugs and functional foods.