Nanobiotechnology is gaining immense impetus in this era owing to its ability to modulate metals into their nanosize by efficiently changing its physical, chemical, and optical properties. The biosynthesis of nanoparticles is considered as more valuable and environment-friendly than conventional physical and chemical methods, which often utilize toxic chemicals that are hazardous to heath and cause environment pollution. The biogenic synthesis of nanoparticles can be achieved by utilizing numerous naturally occurring biomolecules from different species of plants, bacteria, fungi, and algae. Algae are one of most diverse and cosmopolitan group of aquatic organisms with several pharmaceutical, medical, agricultural, industrial, engineering, and aquaculture applications. The synthesis of nanoparticles by utilizing algae and algal products is considered as cost-effective, non-toxic, sustainable, and environment-friendly. In this chapter, algal-mediated synthesis of nanoparticles, mechanism of synthesis and factors affecting it, characterization techniques, and novel applications of algal nanoparticles are discussed.