Phage libraries are now amongst the most prominent approaches for the identification of high-affinity antibodies/peptides from billions of displayed phages in a specific library through the biopanning process. Due to its ability to discover potential therapeutic candidates that bind specifically to targets, phage display has gained considerable attention in targeted therapy. Using this approach, peptides with high-affinity and specificity can be identified for potential therapeutic or diagnostic use. Furthermore, phage libraries can be used to rapidly screen and identify novel antibodies to develop immunotherapeutics. The Food and Drug Administration (FDA) has approved several phage display-derived peptides and antibodies for the treatment of different diseases. In the current review, we provided a comprehensive insight into the role of phage display-derived peptides and antibodies in the treatment of different diseases including cancers, infectious diseases and neurological disorders. We also explored the applications of phage display in targeted drug delivery, gene therapy, and CAR T-cell.