Production of biofuels and other value-added products from wastewater along with quality treatment is an uttermost necessity to achieve environmental sustainability and promote bio-circular economy. Algae-Microbial fuel cell (A-MFC) with algae in cathode chamber offers several advantages e.g. photosynthetic oxygenation for electricity recovery, CO-fixation, wastewater treatment, etc. However, performance of A-MFC depends on several operational parameters and also on electrode materials types; therefore, enormous collective efforts have been made by researchers for finding optimal conditions in order to enhance A-MFC performance. The present review is a comprehensive snapshot of the recent advances in A-MFCs, dealing two major parts: 1) the power generation, which exclusively outlines the effect of different parameters and development of cutting edge cathode materials and 2) wastewater treatment at cathode of A-MFC. This review provides fundamental knowledge, critical constraints, current status and some insights for making A-MFC technology a reality at commercial scale operation.