Nanomaterials, such as nanoparticles, nanorods, nanosphere, nanoshells, and nanostars, are very commonly used in biomedical imaging and cancer therapy. They make excellent drug carriers, imaging contrast agents, photothermal agents, photoacoustic agents, and radiation dose enhancers, among other applications. Recent advances in nanotechnology have led to the use of nanomaterials in many areas of functional imaging, cancer therapy, and synergistic combinational platforms. This review will systematically explore various applications of nanomaterials in biomedical imaging and cancer therapy. The medical imaging modalities include magnetic resonance imaging, computed tomography, positron emission tomography, single photon emission computerized tomography, optical imaging, ultrasound, and photoacoustic imaging. Various cancer therapeutic methods will also be included, including photothermal therapy, photodynamic therapy, chemotherapy, and immunotherapy. This review also covers theranostics, which use the same agent in diagnosis and therapy. This includes recent advances in multimodality imaging, image-guided therapy, and combination therapy. We found that the continuous advances of synthesis and design of novel nanomaterials will enhance the future development of medical imaging and cancer therapy. However, more resources should be available to examine side effects and cell toxicity when using nanomaterials in humans.