Diabetes mellitus (DM) is a chronic disorder considered as sustained hyperglycemia, affected by insufficient insulin production and/or action, leading to progressive organ damage. It primarily presents as type 1 (T1DM) or type 2 (T2DM). T1DM is an autoimmune-related disease resulting in beta-cell destruction as well as complete insulin deficiency, while T2DM involves insulin resistance and deficiency in insulin associated with lifestyle changes. Emerging research suggests that bioactive compounds derived from algae, including phlorotannins, polyphenols, and carotenoids, possess antioxidant, anti-inflammatory, and insulin-sensitizing effects. These bioactives appear to enhance key insulin signaling pathways, notably PI3K/Akt and AMPK, and reduce inflammation, offering protective benefits to β-cells. Species such as Spirulina platensis and Ulva lactuca contain molecules that support glucose homeostasis, mitigate oxidative stress, and improve lipid profiles, positioning algae-based bioactives as promising adjuncts in diabetes management. These natural compounds could help alleviate hyperglycemia-induced tissue damage and preserve pancreatic function. This chapter highlights the mechanisms through which algae-derived bioactives combat oxidative stress, inflammation, and disrupted insulin signaling in diabetes. Advances in precision nutrition further underscore the potential of these compounds to improve metabolic health as well as quality of life in patients with DM.