<p>Environment-friendly procedures are becoming more essential as the agricultural sector attempts to balance sustainability and productivity. The prolonged application of chemical fertilizers can cause adverse effects on plants, humans, and other ecological systems. Under these circumstances, research on other ways of conception has become progressively important by focusing on the application of biofertilizers. A potentially practical approach is to replace chemical fertilizers with microalgal sources and nanoparticles. Microalgae are an encouraging choice for sustainable agriculture because of its high nutrient content and effectively act as growth-promoting agents in plant development. Recently, extensive research have carried out by performing different treatment techniques such as seed treatment, foliar, and soil application using different biomass and extracts of microalgae for plant growth, productivity, and yield. Similarly, adding nanoparticles via foliar and soil application to plants and soil promotes plant growth and increases plant productivity. Thus, an ideology of combining these microalgal extracts and nanoparticles for effective plant growth have developed recently. This review outlines the negative impacts of chemical fertilizers on the environment and shows possible substitute approach. Recent research and development on biologically synthesized nanoparticles from various microalgal extracts and its positive effects on plants have highlighted. Additionally, it provides an effective combination of microalgal extracts and nanoparticles as bio-nanofertilizers for sustainable agricultural practices. Moreover, it addresses the circular economy of treating wastewater by microalgae cultivation in wastewater and using that microalgal biomass or extracts for plant growth as dual applications of biofertilizers and bioremediation.</p> Graphical abstract <p></p>