Nanomedicine is the application of nanotechnology in medicine. This review is focused on the use of both lytic and temperate bacteriophages (phages) nanoparticles in nanomedicine, in particular, in the context of developing nanoprobes for precise disease diagnosis and nano-therapeutics for targeted disease treatment. Phages as bacteria-specific viruses do not naturally infect eukaryotic cells and are not toxic to them. They not only can be genetically engineered to bear the capability of targeting nanoparticles, cells, tissues, and organs, but also can be integrated with functional abiotic nanomaterials to gain physical properties that enable disease diagnosis and treatment. Therefore, they are ideal for many applications in precision nanomedicine. This review will summarize the current use of the great diversity of phage structures in many aspects of precision nanomedicine including ultrasensitive biomarker detection, enhanced bioimaging for disease diagnosis, targeted drug and gene delivery, directed stem cell differentiation, accelerated tissue formation, effective vaccination, and nano-therapeutics for targeted disease treatment. It will also propose future directions in the area of phage-based nanomedicines as well as the state of phage-based clinical trials.