As a result of its brief lifespan, food packaging contributes significantly to environmental contamination through the rapid accumulation of plastic in the environment. In order to mitigate these impacts and provide a food packaging solution that is more environmentally sustainable, researchers have created biodegradable and biobased polymers, which are presently being introduced to the market. The current state of research regarding the incorporation of seaweed into food packaging and active packaging is summarized in this study. In order to emphasize the benefits of polysaccharides and draw attention to the constraints of current research, this study also presents a synopsis of the effects of seaweed incorporation on a range of properties, including chemical, physical, thermal, antioxidant, antimicrobial, and mechanical attributes, in addition to the release of active compounds. A multitude of polysaccharides, including those found in seaweed, have the potential to enhance the antibacterial, thermal, and mechanical properties of these polymers, among other attributes. In addition to increasing hydrophilicity and mechanical properties such as tensile strength and elongation at break, they suggest employing it as active packaging. This is feasible as a result of the antioxidant properties of seaweed, which inhibit lipid oxidation and decrease toxic, mutagenic, or carcinogenic free radicals, thereby extending the nutritional value and shelf life of food. Certain varieties of seaweed have exhibited the capacity to impede the proliferation of bacteria classified as gram-positive and gram-negative. Thus, their prospective application as antimicrobial packaging is indicated.