Algae have gained increasing attention as promising food from both an environmental and nutritional perspective. However, current understanding is still limited. This report summarizes the status of knowledge for this emerging sector, focusing on micro- and macroalgae species most relevant for Europe (particularly Sweden). Environmental impacts, with focus on climate, are evaluated through literature reviews and analysis of existing life cycle assessments (LCAs), and nutritional potential in the form of data compilation and calculation of nutrient density scores. Overall, findings reveal that current data is incomplete and of poor representativeness. Most LCAs are not performed on commercial production, but at pilot or experimental scale, why often only indicative drivers for greenhouse gas emissions may be identified. For microalgae, there is a wide diversity of production systems in different conditions across the globe. Based on the data at hand, energy use is a key hotspot across most studies for this production, driven by the requirements of different types of systems and species, and to location. For macroalgae production, despite poor representativeness of especially green and red macroalgae, key aspects for minimizing greenhouse gas emissions are associated with energy consumption and use of materials for farming such as ropes. No LCA exists on wild harvested macroalgae, representing the largest production volume in Europe (>95%); large-scale wild harvest may also be associated with risks to ecosystems unless suitable management is enforced. Significant data gaps also exist in food composition databases regarding nutrient and heavy metal content in algae (e.g., vitamins and omega-3 fatty acids). When available, nutrient content was found to be highly variable within and across species, but overall, the evaluation of nutritional quality indicated that algae may be a considerable source of minerals and vitamin B12. The contribution of fiber and protein is generally minimal in a 5 g dry weight portion of macroalgae; microalgae may have higher protein content, and also fat. However, excessive amounts of iodine and several heavy metals may be represented even in very small amounts of unprocessed macroalgae. In summary, the suggested potential of farmed algae as a sustainable food resource is overall strengthened by its generally low carbon footprint during production compared to other food raw materials. However, more input data are needed to fill data gaps regarding both environmental impacts and nutrient quality, and effects from different processing, as well as improved understanding of nutrient and contaminant bioavailability. Pending further research, careful considerations of risks and benefits associated with algae production and consumption should be applied.