The remarkable versatility of MXenes—a type of two-dimensional (2D) transition metal carbides, nitrides, and carbonitrides—has led to considerable interest in their use in cancer nanotheranostics and tissue engineering. They are perfect candidates for creating cutting-edge biomaterials because of their remarkable physicochemical characteristics, which include high surface area, conductivity, hydrophilicity, and variable surface functionality. MXene nanomaterials have become a rising star in biomedical fields including biological imaging, tumor diagnosis, anti-tumor therapy, biosensor, and tissue engineering in the past few years. The extraordinary capabilities of MXene composite in boosting angiogenesis and tissue remodeling and improving cell adhesion, proliferation, and differentiation are well-established. Their biocompatibility and mechanical durability make them ideal scaffolds for regenerating complicated tissues, such as cardiac and bone tissue. Moreover, the surface functionalization of MXenes allows for the incorporation of bioactive molecules, which further boosts their therapeutic potential. The use of MXenes as multifunctional theranostic platforms has grown popular due to their unique optical and electrical characteristics, enabling cutting-edge imaging modalities such as photoacoustic imaging and magnetic resonance imaging (MRI), as well as in photothermal therapy (PTT), photodynamic therapy (PDT), and drug carrier systems. This review provides a comprehensive update on the recent progress in MXenes and their composites, highlighting their transformative potential in tissue engineering and cancer nanotheranostics while addressing future research directions.