Exosomes, the endosome-derived bilayered extracellular nanovesicles with their contribution in many aspects of cancer biology, have become one of the prime foci of research. Exosomes derived from various cells carry cargoes similar to their originator cells and their mode of generation is different compared to other extracellular vesicles. This review has tried to cover all aspects of exosome biogenesis, including cargo, Rab-dependent and Rab-independent secretion of endosomes and exosomal internalization. The bioactive molecules of the tumor-derived exosomes, by virtue of their ubiquitous presence and small size, can migrate to distal parts and propagate oncogenic signaling and epigenetic regulation, modulate tumor microenvironment and facilitate immune escape, tumor progression and drug resistance responsible for cancer progression. Strategies improvised against tumor-derived exosomes include suppression of exosome uptake, modulation of exosomal cargo and removal of exosomes. Apart from the protumorigenic role, exosomal cargoes have been selectively manipulated for diagnosis, immune therapy, vaccine development, RNA therapy, stem cell therapy, drug delivery and reversal of chemoresistance against cancer. However, several challenges, including in-depth knowledge of exosome biogenesis and protein sorting, perfect and pure isolation of exosomes, large-scale production, better loading efficiency, and targeted delivery of exosomes, have to be confronted before the successful implementation of exosomes becomes possible for the diagnosis and therapy of cancer.