Diatoms are globally recognized for their unique characteristic of having silica-based cell walls and immense biological and industrial potential. They have been increasingly utilized in environmental monitoring and bioremediation. Due to their biocompatibility and large surface area, diatoms are regarded as prime candidates for drug delivery systems and nanotechnology. Their distinctive metabolic processes enable them to produce a variety of bioactive compounds, including fucoxanthin, PUFAs (polyunsaturated fatty acids), isoprenoids, and phenolics, making them essential in several commercial sectors. Diatoms are valuable in various industries including the food and feed industries, as they are rich in bioactive compounds like fatty acids, polysaccharides, pigments and polyphenols. Recent advancements in microalgal technology are enhancing the extraction and production of these compounds, particularly omega-3 fatty acids and fucoxanthin, which have promising applications in health foods, dietary supplements and functional foods. This chapter examines the potential of PUFA-rich diatoms for their potential into production of high-value products, including nutraceuticals and dietary supplements, owing to their significant health benefits.