Exosomes offer distinct advantages that uniquely position them as highly effective drug carriers. Comprised of cellular membranes with multiple adhesive proteins on their surface, exosomes are known to specialize in cell-cell communications and provide an exclusive approach for the delivery of various therapeutic agents to target cells. In addition, exosomes can be amended through their parental cells to express a targeting moiety on their surface, or supplemented with desired biological activity. Development and validation of exosome-based drug delivery systems are the focus of this review. Different techniques of exosome isolation, characterization, drug loading, and applications in experimental disease models and clinic are discussed. Exosome-based drug formulations may be applied to a wide variety of disorders such as cancer, various infectious, cardiovascular, and neurodegenerative disorders. Overall, exosomes combine benefits of both synthetic nanocarriers and cell-mediated drug delivery systems while avoiding their limitations.