Advances in digital health care have driven innovations in high‐performance wearable and smart sensors. One requirement in this field is establishing healthy, secure, and reliable medical devices for precisely monitoring vital signs of the human body or the surrounding environment through flexible sensors with not only high‐sensing performance but also excellent biofunctionality. Smart wearable sensors with excellent biofunctionality furnish medical devices with various smart functions such as biocompatibility, biodegradability, and self‐healing, which have attracted widespread interest from device engineers and materials scientists. Herein, a comprehensive review of the latest progress concerning these smart wearable sensors is presented with a focus on bio‐multifunctional (biocompatible, biodegradable, and self‐healing) device designs. The medical applications of bio‐multifunctional smart wearable sensors are also briefly covered, and to conclude, a discussion of the challenges, opportunities, and future perspectives is provided.