The potential of the marine microalgal isolate Phormidium sp. to detoxify/reduce various pollutants from a highly hazardous mixed industrial effluent (MIE) is evaluated. The microalgae are grown in the MIE at 30% (v/v%) strength for 21 days under controlled environmental conditions. The reductions/changes in concentrations of biochemical oxygen demand (BOD), chemical oxygen demand (COD), nitrate, nitrite, total phosphate, and toxic metals (chromium, nickel, manganese, copper) are monitored. Notably, the isolate grew quite well, reducing the levels of BOD by 93% and those of COD by 71% in 6 to 9 days. Concentrations of other measured contaminants are also reduced to within the permissible limits of discharge. Higher rates of hatchability in Artemia salina cysts and survivability of its hatchlings are observed in the algae‐treated wastewater than in the untreated wastewater, indicating safe discharge of the wastewater. These observations are valuable, as they indicate that many environmental strains of microalgae possess the potential to detoxify certain hazardous MIEs and can adequately improve the quality of water for reuse/discharge, thereby safeguarding our natural environments from the detrimental effects of direct disposal.