The genus Phoma contains several species ubiquitously present in soil, water, and environment. There are two major groups of Phoma, viz., terrestrial and marine. After 1981 researchers all over the world have focused on marine-derived Phoma for their bioactive compounds. The marine Phoma are very rich sources for novel bioactive secondary metabolites, which could potentially be used as drugs. Recently, a large number of structurally unique metabolites with potential biological and pharmacological activities have been isolated from the marine Phoma species particularly Phoma herbarum, P. sorghina, and P. tropica. These metabolites mainly include diterpenes, enolides, lactones, quinine, phthalate, and anthraquinone. Most of these compounds possess antimicrobial, anticancer, radical scavenging, and cytotoxic properties. The present review has been focused on the general background of Phoma, current approaches used for its identification and their limitations, difference between terrestrial and marine Phoma species. In addition, this review summarizes the novel bioactive compounds derived from marine Phoma and their biological activities.