Structural coloration is widespread in the marine environment. Within the large variety of marine organisms, macroalgae represent a diverse group of more than 24 000 species. Some macroalgae have developed complex optical responses using different nanostructures and material compositions. In this review, we describe the mechanisms that are employed to produce structural color in algae and provide a discussion on the functional relevance by analyzing the geographical distribution and ecology in detail. In contrast to what is observed in the animal kingdom, we hypothesize that structural color in algae predominantly functions for a non‐communicative purpose, most likely protection from radiation damage, e.g., by harmful UV light. We suggest that the presence of structural color in algae is likely influenced by local factors such as radiation intensity and turbidity of the water.