In order to survive in a highly competitive environment, freshwater or marine algae have to develop defense strategies that result in a tremendous diversity of compounds from different metabolic pathways. Recent trends in drug research from natural sources have shown that algae are promising organisms to furnish novel biochemically active compounds. The current review describes the main substances biosynthesized by algae with potential economic impact in food science, pharmaceutical industry and public health. Emphasis is given to fatty acids, steroids, carotenoids, polysaccharides, lectins, mycosporine-like amino acids, halogenated compounds, polyketides and toxins.