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The rising living standards of humans have a high demand for natural resources. Algal biomass has emerged as a substitute for conventional resources obtained from animals and plants. Compositionally, algae constitute extractable carbohydrates, proteins, lipids, and other valuable bioactive compounds (BACs) in abundance. BACs profusely derived from algal biomass include long-chain polysaccharides, fatty acids such as mono- and polyunsaturated fatty acids (MUFA and PUFA), phenols, and proteins. The coupling of wastewater with algae for resource recovery for the BACs extraction can serve as a source of plenteous biochemicals with high industrial values like pigments, polysaccharides, lipids, antioxidants, and growth-promoting compounds. Extracted algal BACs can incorporate in the manufacturing of numerous cosmetic products, pharmaceuticals, and nutraceuticals. The productivity and quality of algal produce are still low relative to their demand. Genetic engineering has emerged as a proven approach to enhance the quality and quantity of algal produces and provide a better avenue for biofuel and value-added chemicals productions. Currently, genetic engineering has grabbed significant attention from researchers, and continuous efforts are encouraged to improve industrially viable algal species that can satisfy future demand. This article focuses on the wide range of BACs derived from algae and wastewater for resource recovery, genetic engineering in algae for BACs, influencing processing parameters for genetic engineered algae, concerns associated with genetic engineered algae, and future perspective.