The utilization of microalgal pigments holds significant promise across various industries, including food, pharmaceuticals, and cosmetics, due to their natural origin and bioactive properties. However, the stability of these pigments is a critical challenge that must be addressed to ensure their practical application and commercialization. This chapter delves into the essential downstream processing techniques for producing microalgal pigments and their effects on the stability of these compounds. It explores biochemical characteristics of carotenoids and phycocyanin, susceptibility to environmental factors (light, temperature, pH, and oxygen), some advanced and purification methods, and some protective methods against degradation. Additionally, the chapter will discuss protective methods against degradation, including encapsulation, microencapsulation, and the use of preservatives. By integrating these aspects, this chapter aims to provide a robust framework for enhancing microalgal pigments’ shelf life and functional efficacy, thereby facilitating their broader industrial application.