Coacervate is a form of liquid-liquid phase separation (LLPS) in which a solution containing one or more charged components spontaneously separates into two immiscible liquid phases. Due to their ability to mimic membraneless cellular environments and their high biocompatibility, coacervates have found broad applications across various fields of life sciences. This review provides a comprehensive overview of recent advances in biomolecule-based coacervation for biotechnological and biomedical applications. Encapsulation via biomolecule-based coacervation enables high encapsulation efficiency, enhanced stability, and the sustained release of cargos. In the field of tissue engineering, coacervates not only support cell adhesion and proliferation but also serve as printable bioinks with tunable rheological properties for 3D bioprinting. Moreover, biomolecule-based coacervates have been utilized to mimic membraneless organelles, serving as experimental models to understand the origin of life or investigate the mechanisms of biochemical compartmentalization. This review discusses the mechanisms of coacervation induced by various types of biomolecules, evaluates their respective advantages and limitations in applied contexts, and outlines future research directions. Given their modularity and biocompatibility, biomolecule-based coacervates are expected to play a pivotal role in next-generation therapeutic development and the construction of controlled tissue microenvironments, especially when integrated with emerging technologies.