The need for more effective environmental monitoring of the open and coastal ocean has recently led to notable advances in satellite ocean color technology and algorithm research. Satellite ocean color sensors' data are widely used for the detection, mapping and monitoring of phytoplankton blooms because earth observation provides a synoptic view of the ocean, both spatially and temporally. Algal blooms are indicators of marine ecosystem health; thus, their monitoring is a key component of effective management of coastal and oceanic resources. Since the late 1970s, a wide variety of operational ocean color satellite sensors and algorithms have been developed. The comprehensive review presented in this article captures the details of the progress and discusses the advantages and limitations of the algorithms used with the multi-spectral ocean color sensors CZCS, SeaWiFS, MODIS and MERIS. Present challenges include overcoming the severe limitation of these algorithms in coastal waters and refining detection limits in various oceanic and coastal environments. To understand the spatio-temporal patterns of algal blooms and their triggering factors, it is essential to consider the possible effects of environmental parameters, such as water temperature, turbidity, solar radiation and bathymetry. Hence, this review will also discuss the use of statistical techniques and additional datasets derived from ecosystem models or other satellite sensors to characterize further the factors triggering or limiting the development of algal blooms in coastal and open ocean waters.