Taxonomic identification of algae is widely used in algal genetics, physiology, ecology, applied phycology, and particularly bioassessment. Errors in identification have been caused by the inherent problems of atypical or absent taxonomic features, research-grade microscopes, and inadequate taxonomic expertise. In recent years, as longer, cheaper, and faster DNA sequencing technologies have become more accessible, molecular markers have increasingly become universal tools in algae identification. The selection of molecular markers is critical for the molecular identification of algae because there are obvious differences among various phyla. We reviewed the progress in selecting and applying molecular markers in Cyanophyta, Bacillariophyta, Chlorophyta, Pyrrophyta, Euglenophyta, Cryptophyta, Chrysophyta, Xanthophyta, Rhodophyta, and Phaeophyta, and examined the principles governing selection, common molecular markers, improvements in the sequence database, and the advantages and disadvantages of the application in different phyla. Identifying species using nucleic, mitochondrial, and chloroplast DNA has become commonplace in recent years. To date, it has been considered that combining multiple markers of ribosomal DNA (rDNA), internal transcribed spacers (ITS), and conserved protein coding genes is much more effective than using a single marker for algae molecular identification. In addition, the mitochondrial, chloroplast, and nuclear genome, transcriptome, and metagenome contain large amounts of phylogenetic information, and their use is becoming significant for phylogenetic analysis as well as in the classification of algae. Potentially, they represent giant molecular markers for use in future research into algae systematics. Phylogenetic analysis on the basis of molecular markers, together with morphological features, is insufficient for exact identification. A polyphasic approach-combining features from molecular biology, morphology, physiology, and biochemistry-has been applied in algae classification and will become the strategy of choice for accurate and systematic algae classification and identification. Databases are essential for the application of algae molecular identification, and much work needs to be done to perfect the databases for the molecular marker for each alga. The rapid identification approach on the basis of molecular markers will be widely applied in future.