Industrial production processes, especially petroleum processing, will produce high concentration phenolic wastewater. Traditional wastewater treatment technology is costly and may lead to secondary pollution. In order to avoid the adverse effects of incompletely treated phenolics, more advanced methods are required. Algae bioremediate phenolics through green pathways such as adsorption, bioaccumulation, biodegradation, and photodegradation. At the same time, the natural carbon fixation capacity of algae and its potential to produce high-value products make algal wastewater treatment technology economically feasible. This paper reviews the environmental impact of several types of phenolic pollutants in wastewater and different strategies to improve bioremediation efficiency. This paper focuses on the progress of algae removing phenols by different mechanisms and the potential of algae biomass for further biofuel production. This technology holds great promise, but more research on practical wastewater treatment at an industrial scale is needed in the future.