Algae are a rich source of bioactive compounds with multifunctional properties, including antiaging, moisturizing, antioxidant, anti-inflammatory, and UV-protective effects. South Africa hosts exceptional algal diversity, with approximately 850 species, many of which are endemic, providing unique opportunities for the development of sustainable cosmetic products. Despite this potential, indigenous knowledge on the cosmetic use of algae in South Africa remains largely undocumented. Evidence from other regions highlights traditional applications of algae in skin and hair care, including wound healing, soothing, and moisturizing, offering a foundation for future local innovations. Biotechnological advancements, such as microalgal cultivation in photobioreactors (PBRs)Photobioreactors (PBRs) and sustainable macroalgal aquaculture, optimize the production of high-value metabolites while ensuring environmentally responsible practices. Innovative formulation strategies, including green extraction techniques, nanoencapsulation, and bioactive stabilization, enhance the efficacy, bioavailability, and multifunctionality of algae-derived ingredients in cosmetics. Valorization of residual biomass further promotes circular economy principles by enabling applications in low-cost cosmetic ingredients, fertilizers, and environmental remediation, while reducing pressure on wild populations. Integrating traditional ecological knowledge with modern scientific and biotechnological approaches supports ethical innovation and responsible commercialization. International frameworks, such as the Nagoya Protocol, provide mechanisms for equitable benefit-sharing and protection of cultural heritage. South African algae therefore represent a renewable, multifunctional, and ethically sourced platform for natural and sustainable cosmetics. Harnessing their bioactivity through sustainable, culturally grounded, and technologically advanced approaches addresses consumer demand for eco-friendly skincare, promotes biodiversity conservation, and generates socioeconomic benefits for local communities.