Surface modification of nanoparticles (NPs) is crucial for their effective utilization in diverse medical conditions, as it addresses challenges such as rapid passive clearance by the immune system, damage to the reticuloendothelial system, lack of specific cell targeting, and inadequate biocompatibility. The natural cell membrane (CM)‐coating technology has recently garnered considerable attention as an optimal strategy for enhancing artificial nanoformulations. This biomimetic technique directly confers inner NPs with multiple functions, such as immune evasion, precise targeting, and excellent biocompatibility, all of which are mediated by source cell‐inherent surface membrane proteins. Additionally, engineering techniques originally designed to enhance existing theranostic modalities employed in clinical settings are applied to natural CM carriers, thereby improving the physical properties of nanomaterials to drive further advancements. In this comprehensive review, diverse CM sources, such as red blood cells, platelets, white blood cells, cancer cells, bacteria, and other unconventional types, the core NPs employed in these cell membrane‐coated nanoparticles (CM‐NPs), preparation methods, and the latest advancements of CM‐NPs across diverse biomedical fields, are reviewed. Engineering strategies for enhancing natural CMs have also been emphasized. Furthermore, the review comprehensively addresses the major challenges and their corresponding solutions in the clinical translation of this evolving field.