The elevated concentrations of phenolic compounds in effluent have significant detrimental effects on aquatic organisms, posing a notable environmental concern. Algae-based remediation of organic wastewater has gained substantial attention due to its cost-effectiveness, efficiency, and environmental compatibility. Industrial processes, notably petroleum processing, are major sources of phenolic compounds, emphasizing the urgency for their remediation. Conventional wastewater treatment methods are costly and may contribute to secondary pollution, necessitating the development of advanced techniques to mitigate the adverse impacts of insufficiently treated phenolics. Algae offer environmentally friendly processes such as adsorption, bioaccumulation, biodegradation, and photodegradation for phenolic bioremediation. Additionally, algae possess carbon fixation capabilities and the potential to produce high-value products, thus enhancing the economic feasibility of algal wastewater remediation technology. This review evaluated the ecological consequences of various phenolic pollutants in effluent and explored diverse approaches to mitigate them, including the optimization of bioremediation processes. Furthermore, the article examined the progress in understanding the mechanisms involved in phenol removal using algae. , this technology exhibits considerable promise, and further research is required to practically implement industrial-scale wastewater remediation.