<p>Diabetes mellitus (DM) is a metabolic disorder and major systemic disease characterized by chronic hyperglycemia, which is attributed to several life-threatening complications, including neuropathy, nephropathy, retinopathy, and currently affects half a billion people worldwide. Natural compounds show strong potential as antidiabetic agents by enhancing glucose regulation, improving insulin sensitivity and enhancing insulin secretion. In particular, algae have attracted interest due to their possible anti-diabetic bioactive compounds. This review aims to provide a thorough synopsis of natural compounds produced from algae that can be used to treat diabetes, along with understanding the underlying processes, such as inhibiting α-amylase, α-glucosidase, protein tyrosine phosphatase 1B (PTP1B), dipeptidyl peptidase 4 (DPP4), and aldose reductase. Besides the mechanism, this review also provides the efficiency of algal bioactive compounds by evaluating their IC₅₀ value against several enzymes responsible for diabetic complications. The worldwide burden of diabetes may be lessened with more study and the improvement of algae-based nutraceuticals.</p> Graphical Abstract <p></p>