Alginate is a biopolymer used extensively in the food, pharmaceutical, and chemical industries. Alginate oligosaccharides (AOS) derived from alginate exhibit superior biological activities and therapeutic potential. Alginate lyases with characteristic substrate specificity can facilitate the production of a broad array of AOS with precise structure and functionality. By adopting innovative analytical tools in conjunction with focused clinical studies, the structure-bioactivity relationship of a number of AOS has been brought to light. This review covers fundamental aspects and recent developments in AOS research. Enzymatic and microbial processes involved in AOS production from brown algae and sequential steps involved in AOS structure elucidation are outlined. Biological mechanisms underlying the health benefits of AOS and their potential industrial and therapeutic applications are elaborated. Withal, various challenges in AOS research are traced out, and future directions, specifically on recombinant systems for AOS preparation, are delineated to further widen the horizon of these exceptional oligosaccharides. •Alginate oligosaccharides (AOS; DP 2 to 25) exhibit diverse biological activities.•Endolytic alginate lyases are used to prepare AOS with defined structure and function.•Advanced analytical tools are required for in-depth AOS structure analysis.•Exolytic lyases are currently recognized as important tools in AOS sequencing.•Recombinant in vivo production of AOS is desirable to obtain highly pure end products.