Carrageenan is one of the seaweed-based biodegradable biopolymers that have gained significant interest in edible and sustainable food packaging. Three kinds of carrageenan, namely, kappa, iota, and lambda, are derived from red seaweed. Among them, kappa carrageenan is well-known for having good film-forming qualities. Carrageenan makes transparent and strong film and acts as a good carrier for bioactive ingredients; thus, it is suitable for developing sustainable, active, and intelligent packaging materials. The intrinsic limitations in carrageenan, such as lack of functionality, low barrier properties, and high hydrophilicity, can be tuned by adding functional active ingredients. Numerous studies on the possibility of carrageenan-based functional packaging for preserving and tracking food shelf life have been published recently. Therefore, this chapter covered the extraction of carrageenan using a variety of techniques, followed by sustainable films and coatings based on carrageenan and their essential characteristics, and finally, the use of carrageenan-based functional packaging in intelligent and active food packaging applications.