Nanotechnology is a novel technology for production and application of nanoscale materials. Although many physical and chemical techniques for the synthesis of nanoparticles have been developed, these methods are not sustainable. Microalgae are interesting microorganisms for simple and eco-friendly synthesis of nanoparticles. Up to now, various metal nanoparticles have been synthesized by different microalgae and many applications have been explored for them. Various parameters such as concentration of metal salt, microalgae species, pH, reaction time, reaction temperature, and the culture condition of microalgae can affect the rate of nanoparticle production, as well as nanoparticle quantity and quality. For using green synthesized nanoparticles for medical applications, especially in pharmaceutical industries, they should conform to the US food and drug administration (FDA) criteria. In this review, we explain the biosynthesis of metal and metal oxide nanoparticles by using microalgae and the involved mechanisms. Effective parameters to control physical characteristics of nanoparticles such as size, shape, dispersity, and stability of particles are summarized with a focus on quality control and standards for medical purposes.