Polyethylene terephthalate (PET) is a huge part of consumer products such as beverage bottles, packaging materials, and textile fibres. It contributes significantly to persistent plastic pollution in freshwater ecosystems. This study explores the biodeterioration potential of seven indigenous freshwater microalgae isolated from water bodies near Indore, India, for sustainable PET degradation without chemical pre-treatment. Algal strains were incubated with PET granules for 20 days under controlled laboratory conditions (pH-7.2, temp. 27 ± 3 °C, light intensity of 40.5 µmol/m2/s, and a 12:12 h light–dark period). The average specific growth rate (μ) of the microalgal strains was 0.07 ± 0.01 μ/day. Among these, Asterarcys quadricellulare exhibited the highest deterioration efficiency, achieving a weight loss of 10%, followed by Scenedesmus sp. with a weight loss of 6%. Scanning electron microscopy (SEM), ATR-FTIR spectroscopy, and X-ray diffraction (XRD) analysis revealed notable cracks, chemical alterations, and reduction in crystallinity, respectively. Transmittance intensity of the characteristics FTIR spectra at 1715 cm−1 demonstrated a sharp increase, indicating the formation of carbonyl groups. The reduction in the crystallinity of PET granules was consistently demonstrated by both FTIR and XRD analyses, confirming structural deformities induced by the algal strains. Biochemical analysis revealed that strains A. quadricellulare, C. proboscideum, and P. daitoensis exhibited a significant increase in lipid, protein, and carbohydrate concentration compared to the control. This study highlights the efficacy of unicellular microalgal strains in mitigating PET pollution in aquatic systems while enabling biomass valorisation for other sustainable applications.