The genus Gracilaria produces 80% of the world's industrial agar. Agar of this genus is a promising biologically active polymer, which has been used in the human diet and folk medicine, alternative for weight loss, treatment of diarrhea, etc. With more attention paid to the genus Gracilaria‐sulfated agarans (GSAs), they exhibited multitudinous health benefits in antioxidant, antiviral, antibacterial, prebiotics, anti‐tumor, anticoagulant, and antidiabetic. Various preparation procedures of GSAs making the diversities of structure and biological activity. Therefore, this review summarized the isolation, identification, bioactivity potentials, and applications of GSAs, providing a reference to the development of GSAs in functional food and pharmaceutical industry. Practical applications The genus Gracilaria is known as a raw material for agar extraction. GSAs are food‐grade agaran with the properties of thermoreversible gels at low concentrations, which are commonly used as an additive for making candies as well as raw material for making soup and snacks. They are used in folk medicine to treat diarrhea and other diseases. As an important bioactive macromolecule, GSAs have various biological activities (such as antioxidant, antiviral, antibacterial, probiotic, anti‐tumor, anticoagulant, and antidiabetic activities), and have the potential to be developed as functional food and medicine. They could also be used to create innovative agar‐based products such as antibacterial films and drug carriers.