The advancements in nanotechnology and nanomedicine are projected to solve many glitches in medicine, especially in the fields of cancer and infectious diseases, which are ranked in the top five most dangerous deadly diseases worldwide by the WHO. There is great concern to eradicate these problems with accurate diagnosis and therapies. Among many developed therapeutic models, near infra-red mediated phototherapy is a non-invasive technique used to invade many persistent tumors and bacterial infections with less inflammation compared with traditional therapeutic models such as radiation therapy, chemotherapy, and surgeries. Herein, we firstly summarize the up-to-date research on graphene phototheranostics for a better understanding of this field of research. We discuss the preparation and functionalization of graphene nanomaterials with various biocompatible components, such as metals, metal oxides, polymers, photosensitizers, and drugs, through covalent and noncovalent approaches. The multifunctional nanographene is used to diagnose the disease with confocal laser scanning microscopy, magnetic resonance imaging computed tomography, positron emission tomography, photoacoustic imaging, Raman, and ToF-SMIS to visualize inside the biological system for imaging-guided therapy are discussed. Further, treatment of disease by photothermal and photodynamic therapies against different cancers and bacterial infections are carefully conferred herein along with challenges and future perspectives.