Oligosaccharides derived from natural resources are attracting increasing attention as both food and nutraceutical products because of their beneficial health effects and lack of toxicity. During the past few decades, many studies have focused on the potential health benefits of fucoidan. Recently, new interest has emerged in fucoidan, partially hydrolysed into fuco-oligosaccharides (FOSs) or low-molecular weight fucoidan, owing to their superior solubility and biological activities compared with fucoidan. There is considerable interest in their development for use in the functional food, cosmetic, and pharmaceutical industries. Therefore, this review summarises and discusses the preparation of FOSs from fucoidan using mild acid hydrolysis, enzymatic depolymerisation, and radical degradation methods, and discusses the advantages and disadvantages of hydrolysis methods. Several purification steps performed to obtain FOSs (according to the latest reports) are also reviewed. Moreover, the biological activities of FOS that are beneficial to human health are summarised based on evidence from in vitro and in vivo studies, and the possible mechanisms for the prevention or treatment of various diseases are discussed.