Amidst the ever-evolving landscape of cosmetics, algae and their derived products have captured substantial worldwide interest, heralding a new era of innovation and sustainability in beauty products. Cosmetic formulations are witnessing an escalating incorporation of extracts from algal biomass owing to the diverse metabolites making them ideal for studying physiologically active components with unique biochemical properties. The concept of algal biorefinery plays a pivotal role in this context, as it integrates processes to convert algal biomass into a spectrum of valuable products, maximizing resource efficiency and sustainability. Research has proven that the rich and diverse pool of bioactive compounds in algae holds promise for novel nutraceutical, pharmaceutical, and cosmeceutical products. In marine brown algae, compounds like fucoxanthin, polysaccharides, MAAs, and phlorotannins have a variety of functions to combat ultraviolet radiation and protect human skin. Phlorotannins, for instance, contribute to sunscreen and antioxidant properties. The sea environment, teeming with physiologically essential substances, provides an array of cosmeceutical ingredients. Algae also house nutraceutical compounds like polyphenols, carotenoids, fucoidan, alginate, peptides, terpenoids, and polyunsaturated fatty acids, engaging in various biological activities. Algal compounds are emerging as viable alternatives, showcasing beneficial effects even with prolonged use and diverse algae species find widespread application in addressing skin disorders, serving as moisturizers, texture enhancers, sunscreens, and anti-wrinkling agents. This review delves into the bioactive components sourced from algae, especially seaweed and diatoms, unveiling their potential in anti-aging, photo-protection, and skin whitening. The discourse encompasses current applications, challenges, and prospects, highlighting the role of algal biorefinery in providing a sustainable and innovative future for skincare solutions.