Algae culturing utilizing sewage/industrial wastewater is one of the cost-effective and sustainable approaches toward environmental bioremediation. Standalone algae have been proven to successfully remove pollutants from a variety of wastewater, like sewage, household/kitchen wastewater, and dairy wastewater. Studies show efficient removal (up to 90%) of nutrients by algae alone, whereas the removal of chemical oxygen demand (COD) is restricted to 75%–80%. Researchers overcome this limitation by algal–bacterial co-culturing, where symbiotic bacteria help algal growth and enhance biomass yield, as well as COD removal up to 95% can be achieved. Other than COD/nutrients depollution, several microalgal species, namely, Chlorella vulgaris, Phaeodactylum tricornatum, Arthrospira platensis, and Chlamydomonas reinhardtii, have been successfully employed to eliminate heavy metals, salts, plastics, and pesticides from wastewater/surface water. Synthetic biology holds huge potential in enhancing microalgae-based bioremediation of wastewater. A large number of genes are engineered for producing target-driven microalgal workhorses capable of bioremediation of heavy metals. This includes genes that drive sequestration of metal ions into the vacuole and those that facilitate intracellular metal transfer. The utilization of synthetic biology in environmental bioremediation is greatly acknowledged by the ability of bioengineered bacteria/algae to remove recalcitrant pollutants in high temperature and harsh chemical conditions. Emerging pollutants like persistent organic pollutants (POPs) and pharmaceutical and personal care products (PPCPs) are difficult to remove by conventional biological routes, employing bioengineered algae as a feasible and sustainable alternative to remove these pollutants from water. Synthetic biology, however, faces major limitations in bioremediation, including biosafety and biosecurity risks, ethical concerns, regulatory challenges, and risk of secondary contamination. By combining rigorous research, careful risk assessment, public awareness, and strong regulatory frameworks, synthetic biology can be harnessed to develop more effective and sustainable solutions for environmental cleanup.