The global agricultural sector faces increasing challenges in balancing productivity with environmental sustainability. Microalgae-based biofertilizers offer a promising solution by leveraging their nutrient-rich profiles, eco-friendly production, and capacity to enhance soil health and crop performance. This review highlights the diverse mechanisms by which microalgae enhance nutrient cycling, promote plant growth, and reduce dependence on synthetic fertilizers. By synthesizing key findings on the effectiveness of various microalgal species, their production techniques, and field applications, this study emphasizes their potential to revolutionize agricultural practices while mitigating environmental impacts. Addressing challenges in scalability and application standardization will be pivotal for unlocking the full potential of microalgae-based biofertilizers in sustainable agriculture.