Along with the development of marine biological pharmaceutical research, high-effective and low-toxic drugs and functional foods isolated from marine organisms have become a new field of pharmacy and bromatology. The pharmacological actions, such as anti-inflammation, antioxidation, antitumor, immunological enhancement, and hepatorenal protection of C-phycocyanin (C-PC) from Spirulina platensis, have been reported, and C-PC has important value of development and utilization either as drug or as functional food. There are many researches about the various pharmacological actions and mechanisms of C-PC, but related reports are only to some extent integrated deeply and accurately enough, which put some limitations to the further application of C-PC in medicine. Particularly, with the improvement of living standards and attention to health issues, C-PC being a functional food is preferred by more and more people. C-PC is easy to get, safe, and nontoxic; thus, it has a great potential of research and development as a drug or functional food. Here, the separation and purification, physicochemical properties, physiological and pharmacological activities, safety, and some applications are reviewed to provide relevant basis for the development of natural medicine and applied products.