Plasma, the fourth fundamental state of matter, comprises charged species and electrons, and it is a fascinating medium that is spread over the entire visible universe. In addition to that, plasma can be generated artificially under appropriate laboratory techniques. Artificially generated thermal or hot plasma has applications in heavy and electronic industries; however, the non-thermal (cold atmospheric or low temperature) plasma finds its applications mainly in biomedicals and therapeutics. One of the important characteristics of LTP is that the constituent particles in the plasma stream can often maintain an overall temperature of nearly room temperature, even though the thermal parameters of the free electrons go up to 1 to 10 keV. The presence of reactive chemical species at ambient temperature and atmospheric pressure makes LTP a bio-tolerant tool in biomedical applications with many advantages over conventional techniques. This review presents some of the important biomedical applications of cold-atmospheric plasma (CAP) or low-temperature plasma (LTP) in modern medicine, showcasing its effect in antimicrobial therapy, cancer treatment, drug/gene delivery, tissue engineering, implant modifications, interaction with biomolecules, etc., and overviews some present challenges in the field of plasma medicine.