Fucoidans are a kind of naturally sulfated polysaccharides that are primarily derived from brown algae and marine invertebrates. They are mainly composed of L-fucose and sulphate group. In the past decades, fucoidans have been attracted much attention for its wide range of pharmacological activities. However, fucoidans are difficult to be absorbed due to their high molecular weight. Notably, low-molecular weight fucoidan (LMWF) and fuco-oligosaccharide are more readily absorbed and have equal or superior biological activities. Therefore, degradation of fucoidan has become a research hot spot in recent years. Presently, methods for fucoidan degradation primary include enzymatic degradation, chemical degradation, and physical degradation. Enzymatic degradation has advantages of mild hydrolysis conditions, good selectivity and few by-products. Chemical degradation is characterized by simple operation, low cost, and easy for industrial applications. This review article summarizes research progress on fucoidan-degrading enzymes, preparation of LMWF and fuco-oligosaccharides by enzymatic degradation, physical degradation, and chemical degradation, and biological activities of these products. This article provides information useful for chemists that are interested in preparation of LMWF and fuco-oligosaccharides, for pharmacologists that are devoted to develop fucoidan-derived bioactive molecules, and for manufacturers of fucoidan-derived products, thus promoting transformation of these products in food and pharmaceutical areas.