<p>Microbial single-cell proteins (SCPs) made from bacteria, yeast, and algae are gaining popularity due to the growing demand for sustainable protein substitutes worldwide. These proteins, which have an in vitro digestibility of over 85% and Protein Digestibility-Corrected Amino Acid Scores (PDCAAS) of 0.85–0.95, are of high nutritional quality and are produced by the environmentally friendly valorization of agri-food and industrial waste streams. Recent advancements in low-impact extraction and recovery techniques, including enzyme-assisted, ultrasound-assisted, ionic-liquid, and supercritical-fluid methods, have made efficient production with lower energy input and solvent use possible. SCPs produce bioactive peptides like ACE inhibitors, which have potential antioxidant and health-protective properties in addition to their nutritional advantages. Advances in sensory optimization (enzymatic debittering, volatilization control) and regulatory compliance (nucleic acid reduction &lt; 2%, endotoxin removal) have further enhanced their acceptance as food-grade ingredients. With a focus on technological, nutritional, functional, and regulatory advancements from 2020 to 2024, this review critically compares the SCP systems of bacteria, yeast, and algae. To determine scalability and sustainability pathways within a circular bioeconomy framework, it incorporates recent developments in substrate valorization, eco-efficient extraction, and biofunctional characterization.</p>