With urbanization and industrialization on the rise, the issue of environmental toxins has become increasingly prevalent. Toxic substances such as heavy metals, textile dyes, pesticides, fertilizers, etc., are being produced at alarming rates. These contaminants pose a major concern as they are persistent and cannot be easily broken down, remaining in the environment for thousands of years. As a result, the soil, water, and air are being heavily polluted. To combat this issue, the use of phyco-nanomaterials is becoming an attractive approach. The use of naturally occurring algae for the biosynthesis of nanoparticles and its further application in removal of pollutants is proving to be a promising strategy. In the present chapter, we have briefly discussed different methods of nanoparticles synthesis and elaborated nanoparticles synthesis using algae as a biological reducing agent with their characteristics. Further discussion is extended with the potential of phyco-nanoparticles in the removal of pollutants such as textile dyes and heavy metals.