Mass microalgal-bacterial co-cultures have come to the fore of applied physiological research, in particularly for the optimization of high-value metabolite from microalgae. These co-cultures rely on the existence of a phycosphere which harbors unique cross-kingdom associations that are a prerequisite for the cooperative interactions. However, detailed mechanisms underpinning the beneficial bacterial effects onto microalgal growth and metabolic production are rather limited at the moment. Hence, the main purpose of this review is to shed light on how bacteria fuels microalgal metabolism or vice versa during mutualistic interactions, building upon the phycosphere which is a hotspot for chemical exchange. Nutrients exchange and signal transduction between two not only increase the algal productivity, but also facilitates in the degradation of bio-products and elevating the host defense ability. Main chemical mediators such as photosynthetic oxygen, N-acyl-homoserine lactone, siderophore and vitamin B12 were identified to elucidate beneficial cascading effects from the bacteria towards microalgal metabolites. In terms of applications, the enhancement of soluble microalgal metabolites is often associated with bacteria-mediated cell autolysis while bacterial bio-flocculants can aid in microalgal biomass harvesting. In addition, this review goes in depth into the discussion on enzyme-based communication via metabolic engineering such as gene modification, cellular metabolic pathway fine-tuning, over expression of target enzymes, and diversion of flux toward key metabolites. Furthermore, possible challenges and recommendations aimed at stimulating microalgal metabolite production are outlined. As more evidence emerges regarding the multifaceted role of beneficial bacteria, it will be crucial to incorporate these findings into the development of algal biotechnology.