The rapidly advancing field of nanomedicine has witnessed the emergence of polyurethane nanoparticles (PUNPs) as exceptionally versatile tools with transformative potential. This comprehensive review dives into the various roles that PUNPs play in the realm of nanomedicine, positioning them as pivotal components in therapeutic, diagnostic, and theranostic applications. With a focus on their unique characteristics, these nanoparticles offer a platform for precision at the nanoscale, a critical attribute in the intricate landscape of medical interventions. This review precisely navigates through the biobased synthesis method and the recent applications (2019−2023) of PUNPs in the therapeutic, diagnostic, and theranostic fields. Furthermore, it explores innovative approaches in surface functionalization, elucidating how tailored modifications can optimize their interaction with biological entities. Beyond the conventional realm, PUNPs emerge as carriers of therapeutic cargo and strategic players in diagnostics and theranostics, showcasing their multifaceted utility. In conclusion, this review navigates beyond generalized statements, offering a tailored exploration into the specific attributes that make polyurethane nanoparticles indispensable in advancing the frontiers of nanomedicine. Through a meticulous examination of their synthesis, functionalization, and applications, this review aims to contribute a different understanding of PUNPs' versatile roles in drug delivery systems, imaging, and theranostics.