We characterized extended-spectrum β-lactamase (ESBL)-producing and polymyxin-resistant Escherichia coli in raw milk cheese and chicken carcasses in Egypt. A total of 200 raw milk, cheese, and chicken carcass samples were examined. Antimicrobial susceptibility testing and phenotypic confirmation of resistance patterns were done. PCR was performed for various resistance and virulence genes. Phylogenetic grouping was also performed. Two algal extracts of Padina pavonica and Polycladia myrica were tested against virulent MDR E. coli. 14% of samples were E. coli positive, among which 64.3% were classified as multidrug-resistant (MDR), particularly those isolates obtained from chicken carcasses (88.9%). The majority of the isolates were potentially pathogenic, carrying ≥3 virulence factors. The most predominant virulence factor was iss, followed by iutA, eaeA, and Stx1/Stx2. Notably, these virulence determinants were more prevalent in E. coli isolates recovered from chicken carcasses. The potential enteropathogenic E. coli was most frequent, being encountered in 60.7% of the isolates, while 28.6% of isolates were identified as potential enterohemorrhagic E. coli. Importantly, the highly virulent Stx-positive EHEC isolates were recovered exclusively from chicken carcasses. An extraintestinal pathogenic E. coli was found in 3.6%. A high prevalence of ESBLs was evidenced among those isolates, with blaCTX-M being the predominant ESBL identified (96.4%). Additionally, blaSHV and blaCMY-2 were detected. A markedly high prevalence rate of mcr-1 (82.1%) was observed, particularly among chicken carcass isolates. Notably, co-occurrence of ESBL genes and the mcr-1 gene was observed. Most isolates belonged to the low pathogenic group B1 (85.7%). The different algal extracts exhibited varying levels of antimicrobial activity with MIC values ranging from 2.5 to 10 mg/mL. These results address a serious public health issue since it poses a risk to consumers’ health, being a source of dissemination of MDR E. coli, which can cause subclinical to severe and fatal infections in humans.