The rapid growth of aquaculture has caused unprecedented challenges in improving aquatic nutrition, controlling diseases among aquatic species, and effectively managing the waste generated by aquaculture practices. Efforts towards sustainable aquaculture have emphasized the need for natural methods in controlling aquatic diseases and exploring innovative additives in aquatic feeds to better manage and reduce aquatic waste. There is growing interest in using the green seaweed Chaetomorpha linum for sustainable aquaculture. This is because it thrives in waste products from fish farms and sewage treatment, making it a readily available resource. In addition, it has exceptional nutritional value, bioremediation capabilities, and unique biochemical properties within estuarine ecosystems and aquaculture systems. Successful utilization of C. linum in aquaculture practices also signifies a step towards a circular economy, presenting a pathway to more sustainable practices in the industry. This review compiles various studies on the distinctive phytochemical and nutritional properties of C. linum. It aims to assess its suitability for aquaculture applications while identifying existing research gaps. The paper advocates for expanding the use of C. linum biomass in aquaculture but also acknowledges concerns about its opportunistic growth leading to harmful green tides in natural ecosystems.