Algae and bacteria have coexisted ever since the early stages of evolution. This coevolution has revolutionized life on earth in many aspects. Algae and bacteria together influence ecosystems as varied as deep seas to lichens and represent all conceivable modes of interactions - from mutualism to parasitism. Several studies have shown that algae and bacteria synergistically affect each other's physiology and metabolism, a classic case being algae-roseobacter interaction. These interactions are ubiquitous and define the primary productivity in most ecosystems. In recent years, algae have received much attention for industrial exploitation but their interaction with bacteria is often considered a contamination during commercialization. A few recent studies have shown that bacteria not only enhance algal growth but also help in flocculation, both essential processes in algal biotechnology. Hence, there is a need to understand these interactions from an evolutionary and ecological standpoint, and integrate this understanding for industrial use. Here we reflect on the diversity of such relationships and their associated mechanisms, as well as the habitats that they mutually influence. This review also outlines the role of these interactions in key evolutionary events such as endosymbiosis, besides their ecological role in biogeochemical cycles. Finally, we focus on extending such studies on algal-bacterial interactions to various environmental and bio-technological applications.