Livestock wastewater (LW) contains nutrients, pharmaceuticals, heavy metals, and pathogens, significantly contributing to the degradation of water quality. Effective regulation of untreated LW outflows is critical for safeguarding ecosystems and ensuring water security, especially as pollution-induced scarcity intensifies. LW pollution endangers drinking water sources and soil ecology and triggers zoonotic disease risks. Traditional treatment methods often depend on physical and chemical processes that can be expensive, generate carbon emissions, lead to unstable outcomes, and contribute to the waste of recyclable materials, contradicting the principles of sustainable development. Advanced technologies like membrane filtration and oxidation processes, though effective, face economic and operational barriers, particularly for smallholder farmers. Phycoremediation can be effective in treating LW, as it has shown its ability to remove nutrients, heavy metals, and pharmaceuticals from wastewater, and it is feasible to operate in farms with the potential of value-added biomass generation. This review synthesizes recent advancements in microalgae-based LW treatment, focusing on mechanistic pollutant removal pathways, pilot-scale studies, and biomass valorization. It highlights the critical role of microalgae in nutrient recovery, heavy metal and pharmaceutical removal and explores sustainable deployment models, contributing to both environmental protection and bioeconomy growth.