<p>Tightening environmental regulations, emergence of new contaminants, and increased public awareness have accelerated the research on advanced and sustainable wastewater treatment technologies. Even though conventional activated sludge process (ASP) is still effective in removing organic matter and nutrients from wastewater, it is not highly sustainable and not aligning with circular economy principles. Microalgae based systems are a promising alternative to ASP due to its environment friendliness, low energy demand and resource recovery potential. However, two main limitations of microalgae technologies are increased treatment time and difficulties in harvesting the algal biomass for nutrient or material recovery. Hence, microalgae can be combined with bacteria forming a consortium, which exhibit synergistic interactions, resulting in reduced treatment duration and forming a potential and stable wastewater treatment system. This review particularly aims to elucidate various strategies that can be adopted to reduce the hydraulic retention time (HRT) of wastewater treatment using microalgae-bacteria consortia. In addition to that, another thrust area of this review is to demonstrate the capabilities of the consortia for treating a range of industrial wastewaters and emerging contaminants. Algal–bacterial granules are proposed as a potent consortia system for enhanced pollutant removal, withstanding high loading and stress, and suitable for efficient algal harvesting. Process control and stability of the wastewater treatment by the consortia is analysed and methods to improve the biomass productivity are suggested. Microalgae–bacteria consortia exhibited satisfactory removal of industrial pollutants and emerging contaminants compared to monocultures. However, many of such studies employed synthetic wastewater in lab scale, which limit their real-world application. Hence, for wide applicability of microalgae–bacteria consortia systems for wastewater treatment, research should focus on real wastewater having multiple pollutants, pilot scale studies, explore the removal mechanisms deeper, and confirm the non-toxic nature of treated effluent.</p> Graphical abstract <p></p>