Biochar and hydrochar are carbon-rich solid products of algal and terrestrial biomass obtained through various thermochemical processes, mainly hydrothermal liquefaction, pyrolysis, and hydrothermal carbonization. Both are regarded as economical, potent, and environmentally friendly adsorbents for wastewater remediation. The versatile applicability of biochar and hydrochar, which is due to their enhanced surface physicochemical properties, includes efficient metal biosorption, soil fertility enhancement, and carbon sequestration. Consequently, there has been an increase in research for producing and exploiting biochar and hydrochar from algae. Both micro- and macro-algal biomass have strong potential due to their sustainability footprint and distinct properties. This review focuses on a comprehensive account of the synthesis of algal biochar and hydrochar and use in wastewater treatment to develop innovative solutions for efficient mitigation of several aqueous pollutants and heavy metal ions. The review discusses the various thermochemical production routes, biophysical characterization techniques, and modes of mechanism for wastewater bioremediation. Algal-based biochar and hydrochar are reported to have higher porosity and more diverse functional groups such as amines, hydroxyl, and carboxyl compared to their cellulosic and waste-derived counterparts, demonstrating an increased wastewater remediation efficiency. In addition, presence of inorganic metal including sodium, potassium, magnesium, and phosphorus in algal chars facilitates the formation of mesopores and graphite structures, improving their cation exchange capacity. Moreover, algal chars may exhibit pH buffering capacity, which could help stabilize the pH during wastewater treatment processes. Notably, the low O/C content of algal hydrochars enhances the binding and removal of organic pollutants including toxic dyes and antibiotics. The review highlights the development of modified algal chars to enhance the porosity, surface area, structural integrity, and adsorption capacity enabling a higher bioremediation potential.