Rare earth elements (REEs) are important strategic resources reserved by countries in the 21st century, especially in light of a global supply crisis stemming from the increasing demand for REEs in the high-tech industry. State-of-the-art technologies for the capture and recovery of REEs from wastewater are thus essential for a sustainable future. Algae-based technology is considered one of the most promising methods for recovering REEs for its high efficiency, low cost, and wide applicability. This review begins with a discussion of how the characteristics of algae affect the REEs removal process. A systematic analysis and comparison of the underlying adsorption/absorption mechanisms and factors affecting REEs removal from wastewater by dried/living algae are also presented. Inspired by the differences in these mechanisms, various strategies for improving the removal efficiency of REEs by dried and living algae are developed and summarized. Different recycling and resource utilization technologies are analyzed according to the properties of dried and living algae. Finally, prospects of future studies are proposed to aid future efforts for making algae-based REEs recovery technology a commercial reality. Display omitted