<p>Prokaryotic cyanobacteria and eukaryotic microalgae are promising photosynthetic microorganisms that convert solar energy to biomass which is commercially being used for food, dietary supplements, and animal feed. Algae consortia cultivation is a viable technique in the circular bioeconomy because it can grow in non-arable lands using wastewater thereby lower the pollution by sequestering nutrient and recovering from its biomass. Thus, biomass produced becomes valuable for bioenergy and biomolecules, and achieving technical and economic feasibility in bioremediation and pollutant mitigation. Pure or axenic microalgae culture faces challenges like air and water pollution that often contaminate outdoor cultivation. Microalgae-bacteria consortia (MBC) cultivation can help in several ways such as minimize contamination, improve soil fertility by increasing organic matter, increase water storage capacity, and enhance native soil microbiomes composition. Further, MBC interactions enhance the synthesis of carbohydrate, protein, pigments, compounds of cosmetic and pharmaceutical values, and lipids in microalgae via bacteria mediated growth- stimulating substances such as indole-3-acetic acid (IAA), vitamins, and siderophores. Synergistic cultivation is highly praised for its environmental sustainability and contribution to circular bioeconomy, as well as its ability to reduce production costs effectively than monocultures, and perform better than individual strains or species. This review covers the updated details on the interactions between microalgae and bacteria while growing in natural environments that include bacterial association with microalgae, processes that govern their interactions, biotechnological applications, and its role in the bio-based circular economy.</p>