Photodynamic therapy has emerged as a non-invasive treatment modality for various diseases, leveraging photosensitizing compounds to induce localized cytotoxicity upon light activation. This review explores the isolation and characterization of photosensitizing compounds sourced from microalgae, focusing on their potential applications in photodynamic therapy. Microalgae represent a rich source of bioactive molecules, including chlorophylls, phycobiliproteins, and carotenoids, which exhibit inherent photosensitizing properties. Methodologies for the extraction and purification of these compounds from different microalgal species are discussed, emphasizing the importance of optimizing extraction techniques to enhance yield and purity. Characterization techniques such as UV-Vis absorption spectroscopy, fluorescence spectroscopy, and mass spectrometry are highlighted for elucidating the chemical structures and photophysical properties of isolated compounds. Furthermore, the review examines the photodynamic efficacy of microalgae-derived photosensitizers through in vitro and in vivo studies, assessing their cytotoxic effects on cancer cells and antimicrobial activity against pathogens. The integration of microalgae-derived photosensitizers into PDT protocols represents a promising avenue for developing sustainable and effective therapeutic strategies, underscoring the potential of these natural compounds in advancing biomedical applications.