<p>Water scarcity is aggravating problem throughout the globe and necessity is to focus on unconventional sources to reduce clean water stress. Large-scale wastewater treatment is cumbersome due to increasing wastewater complexity, energy and cost-intensive nature of existing technologies. However, microalgae have potential to tolerate wastewater complexity and utilize such complex factors to enhance synthesis of industrially important metabolites. Microalgae assimilate nutrients and concomitantly sequester heavy metals from the contaminated environment through the mechanisms of adsorption, chelation, and bioaccumulation. Though stress conditions like nutrient limitation, salinity, temperature, light irradiance, and stress amalgamation improves lipid and fatty acid accumulation however, it disturbs the reactive oxygen species balance resulting in oxidative damage to microalgae. Enzymatic and non-enzymatic antioxidants to certain extent neutralize oxidative damage, prevent lipid-peroxidation, restore cellular activity and metabolic pathways necessary for survival of microalgae under stress conditions. Furthermore, the techno-economic analysis supported use of microalgae for wastewater treatment, however, multifunctional approach is necessary to enhance its feasibility for large scale cultivation. This review presented role of microalgae in sustainable wastewater remediation together with mechanism responsible for nutrients and heavy-metals removal from contaminated environment. Additionally, the effect of stress conditions on microalgae and defense mechanism adopted to mitigate oxidative damage were discussed in detail. Overall, the study reflected that microalgae can be exploited for nutrient recovery and metal detoxification. However, selecting antioxidant-enriched microalgae will enhance the effectiveness of wastewater treatment plants and facilitate the utilization of stress factors for enhanced synthesis of valuable bioactive compounds.</p>