Upconverting luminescent nanoparticles (UCNPs) are “new generation fluorophores” with an evolving landscape of applications in diverse industries, especially life sciences and healthcare. The anti-Stokes emission accompanied by long luminescence lifetimes, multiple absorptions, emission bands, and good photostability, enables background-free and multiplexed detection in deep tissues for enhanced imaging contrast. Their properties such as high color purity, high resistance to photobleaching, less photodamage to biological samples, attractive physical and chemical stability, and low toxicity are affected by the chemical composition; nanoparticle crystal structure, size, shape and the route; reagents; and procedure used in their synthesis. A wide range of hosts and lanthanide ion (Ln3+) types have been used to control the luminescent properties of nanosystems. By modification of these properties, the performance of UCNPs can be designed for anticipated end-use applications such as photodynamic therapy (PDT), high-resolution displays, bioimaging, biosensors, and drug delivery. The application landscape of inorganic nanomaterials in biological environments can be expanded by bridging the gap between nanoparticles and biomolecules via surface modifications and appropriate functionalization. This review highlights the synthesis, surface modification, and biomedical applications of UCNPs, such as bioimaging and drug delivery, and presents the scope and future perspective on Ln-doped UCNPs in biomedical applications.