Diamond nano-particles or nanodiamonds (NDs) are nano-scale carbon allotropes and exhibit characteristic mechanical and optical properties. Unlike other nanocarbon materials NDs are highly bio-compatible and comparatively safe which makes them the material of future interest in the field of medicine. NDs are synthesized by various techniques which includes detonation technique, chemical vapour deposition, high pressure high temperature etc. and followed by post-synthesis processing such as purification, surface modification and functionalization. Interestingly, the versatile surface chemistry of NDs facilitates the conjugation with various functional groups and chemical moieties, which can be utilized for biomedical applications. Due to their unique optical and spectroscopic properties, NDs have been studied in bio-imaging in which NDs doped with specific atoms such as nitrogen, sodium, boron and were used for cell labelling and/or cell tracking. NDs have also been explored as a targeted drug delivery platform in conjugation with various therapeutic agents such as anti-cancer, anti-bacterial, anti-inflammatory agents etc., attributed to its flexible surface properties. Apart from this, macromolecules like protein and nucleic acids can be delivered in an efficient and safe manner with NDs. This review focuses on the synthesis, surface modification and various biomedical applications of nanodiamonds as a theranostic agent.