<p>The escalating demand for effective and sustainable photoprotection has driven innovation in the sunscreen industry. This review highlights the unique strengths of algae-derived bioactive compounds—including mycosporine-like amino acids, carotenoids, and scytonemin—as next-generation, eco-friendly alternatives to conventional chemical sunscreens. Unlike previous studies, our work provides a comparative analysis of the photoprotective mechanisms, photostability, and multifunctional skin benefits of algal compounds, integrating recent advances in laboratory research and commercial applications. We also critically assess the commercial viability and environmental sustainability of algae-based sunscreens, drawing on current market trends and industry data. By synthesizing these findings, this review underscores the potential of algae-derived ingredients to revolutionize the photoprotective skincare market, offering superior efficacy, safety, and ecological benefits. Our analysis provides actionable insights for researchers and industry stakeholders seeking to advance sustainable skincare solutions.</p>