The biological soil crust method (BSC Method), which was established in Japan, may be a viable strategy for addressing the erosion and sedimentation problems in Malaysia. However, because this strategy has never been tested in a tropical environment, there is concern that it will be washed away by heavy rains and biological disturbance. Thus, identification and characterization of indigenous BSC-forming algae should be prioritized to ensure the effectiveness of the technology. This study was to confirm the presence of biocrust filamentous algae in Malaysia, followed by the collection and isolation of the biocrusts and the identification of their morphological properties. Algal growth and soil-fixing ability were also determined. In this work, we have successfully isolated indigenous filamentous algae, which can be potential candidates for the BSC Method in Malaysia. Results have shown that cultivation with aeration increased the biomass by 1.9-fold after one-week of cultivation. Based on soil erosion tests, it was demostrated that the presence of filamentous alga helped increase the soil surface resistance. Our findings suggest by implementing the BSC Method on selected slopes, soil erosion in Malaysia can be mitigated.