Nanomaterials have emerged as powerful tools in biomedical imaging and therapy, offering unparalleled advantages as contrast and therapeutic agents. Their unique physicochemical properties, including high surface-to-volume ratios, tunable optical and magnetic characteristics, and functionalization capabilities, enable enhanced imaging precision across multiple modalities such as MRI, CT, ultrasound, and fluorescence imaging. Beyond their diagnostic applications, nanomaterials play a pivotal role in targeted drug delivery systems, improving therapeutic efficacy while minimizing systemic toxicity. This chapter explores their integration into advanced therapeutic strategies, such as photothermal and photodynamic therapies, where light-responsive and heat-generating nanoparticles selectively eradicate diseased tissues. Additionally, the concept of theranostics is examined, highlighting the potential of nanomaterials to function simultaneously as diagnostic and therapeutic agents, facilitating personalized and combination treatment approaches. Despite their promising applications, key challenges remain, including biocompatibility, toxicity, regulatory barriers, and scalability for clinical translation. Addressing these hurdles is crucial for the widespread adoption of nanomaterial-based medical technologies. This chapter provides a comprehensive review of the latest advancements, challenges, and future directions in the field, underscoring the transformative potential of nanomaterials in modern medicine.