Cancer involves intricate pathological mechanisms marked by complexities such as cytotoxicity, drug resistance, stem cell proliferation, and inadequate specificity in current chemotherapy approaches. Cancer therapy has embraced diverse nanomaterials renowned for their unique magnetic, electrical, and optical properties to address these challenges. Despite the expanding corpus of knowledge in this area, there has been less advancement in approving nano drugs for use in clinical settings. Nanotechnology, and more especially the development of intelligent nanomaterials, has had a profound impact on cancer research and treatment in recent years. Due to their large surface area, nanoparticles can adeptly encapsulate diverse compounds. Furthermore, the modification of nanoparticles is achievable through a broad spectrum of bio-based substrates, including DNA, aptamers, RNA, and antibodies. This functionalization substantially enhances their theranostic capabilities. Nanomaterials originating from biological sources outperform their conventionally created counterparts, offering advantages such as reduced toxicity, lower manufacturing costs, and enhanced efficiency. This review uses carbon nanomaterials, including graphene-based materials, carbon nanotubes (CNTs) based nanomaterials, and carbon quantum dots (CQDs), to give a complete overview of various methods used in cancer theranostics. We also discussed their advantages and limitations in cancer diagnosis and treatment settings. Carbon nanomaterials might significantly improve cancer theranostics and pave the way for fresh tumor diagnosis and treatment approaches. More study is needed to determine whether using nano-carriers for targeted medicine delivery may increase material utilization. More insight is required to explore the correlation between heightened cytotoxicity and retention resulting from increased permeability.