Agricultural soil has great potential to address climate change issues, particularly the rise in atmospheric CO2 levels. It offers effective remedies, such as increasing soil carbon content while lowering atmospheric carbon levels. The growing interest in inoculating soil with live microorganisms aims to enhance agricultural land carbon storage and sequestration capacity, modify degraded soil ecosystems, and sustain yields with fewer synthetic inputs. Agriculture has the potential to use soil microalgae as inoculants. However, the significance of these microorganisms in soil carbon sequestration and soil carbon stabilization under field conditions has yet to be fully understood. Large-scale commercial agriculture has focused on the development and use of inoculation products that promote plant growth, with a particular emphasis on enhancing yield attributes. Gaining more profound insights into soil microalgae’s role in soil carbon cycling is necessary to develop products that effectively support soil carbon sequestration and retention. This review comprehensively explores the direct and indirect mechanisms through which soil microalgae contribute to soil carbon sequestration, highlighting their potential as microbial inoculants in agricultural settings. This study underlines the need for more research to be conducted on microalgae inoculation into agricultural soil systems aimed at mitigating carbon emissions in the near future.