Phycoremediation, the application of algae for the extraction and biotransformation of contaminants from aquatic environments, has surfaced as a viable sustainable method for water treatment and environmental remediation. This chapter reviews existing information on phycoremediation utilizing freshwater algae, examining its core concepts, frequently utilized species, and practical applications. It discusses the concepts of using freshwater algae for phycoremediation and assesses the species most commonly used and real-world applications of phycoremediation. The research investigates the processes involved in phycoremediation, such as biosorption, bioaccumulation, biotransformation, and biological volatilization. Certain species of freshwater algae, e.g., Chlorella, Scenedesmus, Spirulina, Chlamydomonas, and Botryococcus, have demonstrated their effectiveness in removing various pollutants, such as heavy metals, nutrients, and organic contaminants from water sources. These algae possess qualities that make them suitable for phycoremediation processes due to their high growth rates and efficiency in nutrient removal. Though there are benefits to using these algae for remediation, there are also challenges to consider, such as species selection, optimization of environmental conditions, difficulties in harvesting the algae, ensuring cost-effectiveness, and expanding applications to larger industrial-scale systems. Progress made in designing photobioreactors and applying modern engineering has significantly improved the efficiency of algae-based environmental remediation systems. The research underscores the importance of continuing and expanding research to address challenges and enhance the effectiveness of phycoremediation methods. This chapter gives an up-to-date overview of the status of using freshwater algae for environmental cleanup purposes, points to future areas of study, and informs strategies for managing the environment in the dynamic realm of sustainable water treatment.