Sodium alginate, a natural anionic polysaccharide, possesses excellent biocompatibility, biodegradability, and modifiability and has wide applications in medicine, food, environmental, and other fields. However, its strong inherent hydrophilicity precludes applications that require hydrophobic properties. To address this limitation, this paper systematically reviews physical blendingand chemical modification methods for improving the hydrophobicity and stability of sodium alginate, as well as the applications of modified sodium alginates in drug encapsulation and delivery, wound dressings, oil-water separation and adsorption materials, high-barrier food packaging films, and emulsion stabilizers. These findings provide a reference for the hydrophobic modification and application of sodium alginate.