The concept of algae biorefinery is attracting attention because of the abundant valuable compounds within algal biomass. Phenyllactic acid (PhLA), a broad-spectrum antimicrobial organic acid that can be produced by lactic acid bacteria (LAB), is considered a potential biopreservative. In this study, a cascading biorefinery approach was developed to harvest PhLA from Porphyra residues by LAB fermentation. LAB strains were cultivated in de Man, Rogosa and Sharpe (MRS) broth to screen their ability to produce PhLA. As the strains of Lactobacillus plantarum KP3 and L. plantarum KP4 produced higher concentrations of PhLA at 0.09 mg/mL, these two strains were employed for fermentation. After phycobiliprotein extraction, the Porphyra residues, ultrafiltration eluate, phenylalanine (Phe) and yeast extract with a volume of 20 mL were inoculated with LAB strain KP3 and fermented at 37 °C for 120 h. The PhLA content of the fermented broth was 1.86 mg. To optimize the biorefinery process, the ultrafiltration eluate was replaced by commercial cellulase. Up to 4.58 mg of PhLA, which was 2.5 times greater than that produced from KP3 cultured in MRS broth, could be harvested. Taken together, the findings provide an optimized process for LAB fermentation, which is shown to be a feasible algae biorefinery approach to obtaining PhLA from Porphyra residues.