Fungal and mycotoxin contamination of milk products constitute a potential hazard to human health and food safety. Isolation and identifications of mold and yeast out of 140 milk products samples collected from dairy shops in Qena, Egypt were done through conventional microbiological methods. Aflatoxin-M1, aflatoxin-B1 and ochratoxin-A were characterized by thin-layer chromatography; aflR regulatory gene identified by using PCR. Marine algal extracts of Halimeda opuntia, Padina pavonica and Turbinaria decurrens species were studied for their antimicrobial activity. Overall of 80 and 64% dairy products samples were positive for mold and yeast contamination. A total of 38 mold and 15 yeast species were isolated. Aspergillus and Candida spp. were the most abundant isolated species. Furthermore 25, 40 and 27% of cheese and 71, 78 and 73.3 of dairy desserts samples were contaminated with AFM1, AFB1 and OTA, respectively; with average estimated dietary intake level much more than the acceptable daily intake for infant and adult. PCR identified aflR gene among four selected aflatoxigenic A. flavus. The major constituents of H. opuntia extract were 2,4-Decadienal, (E,E)- (21.56%) and 9,12-Octadecadienoic acid (Z,Z)- (36.16%). Ethyl acetate extract of Halimeda opuntia (3mg/ml) exhibited the strongest fungicidal activity with inhibition zones of 16.5 and 22.3 mm against A. flavus and A. niger. It exhibited potent candidacidal activity against C. tropicalis; 11 log10 orders of killing at 750 µg/ml. The discovered antimicrobial activity of H. opuntia is a promising candidate for designing novel antifungal agents which can be used in food preservatives and medicine industry.