Diamondoids are cage-like hydrocarbon materials with unique characteristics such as low dielectric constants, negative electron affinity, large steric bulk, and electron-donating ability. They are widely used for advanced functional materials in nanocomposite science. Surface modification of diamondoids also produces functional derivatives that broaden its applications. This article provides a concise review of the fundamentals of diamondoids, including their origin and functionalization, electronic structure, optical properties, and vibrational characteristics. The recent advances of diamondoids and their derivatives in applications, such as nanocomposites and thin film coatings, are presented. The fabrication of diamondoid-based nanostructured devices, including electron emitters, catalyst sensors, and light-emitting diodes, are also reviewed. Finally, the future developments of this unique class of hydrocarbon materials in producing a novel nanostructure system using advanced nanotechnologies are discussed. This review is intended to provide a basic understanding of diamondoid properties, discuss the recent progress of its modifications and functionalization, and highlight its novel applications and future prospects.