Diabetes is a major worldwide health issue that calls for original treatment ideas. Diabetic nephropathy (DN) or diabetic kidney disease is a condition marked by pathological amounts of urine albumin excretion, diabetic glomerular lesions, and loss of glomerular filtration rate (GFR) in diabetics. Managing diabetes and its consequences calls for a thorough approach that includes lifestyle changes, glucose-lowering drugs, and focused treatments for particular complications. The varied compositions and pharmacological properties of natural products and their derivatives have become interesting contenders for diabetes control. Algae have attracted interest as a possible source of bioactive chemicals with anti-diabetic qualities. Numerous bioactive substances, including polysaccharides, polyphenols, pigments, fatty acids, and sterols, are produced by algae and have shown a variety of pharmacological characteristics such as ability to improve lipid profiles, increase insulin sensitivity, modify glucose metabolism, have anti-inflammatory and antioxidant properties, all of which are critical for managing diabetes. Studies suggest that these algae-derived bioactive compounds will help in preventing complications from the disease. Hence proving that there is great potential for developing new antidiabetic treatments by utilizing the diverse pharmacological properties of algae.