After the first visible photoluminescence (PL) from porous silicon (pSi), continuous efforts are made to fabricate Si‐based compound nanomaterials embedded in matrices such as oxide, nitride, and carbide to improve optical performance and industrial acceptability. These nanomaterials’ functional and desired properties (nanoparticles and quantum dots embedded in matrices) can vary significantly when embedded in technologically relevant matrices. However, exploring the exact emission mechanisms is one of the remaining challenges from the past few decades. To cover this gap, this review discusses the morphological and optoelectronic properties of Si‐based compound nanomaterials and their correlation with the quantum confinement effect and different surface states to find precise emission mechanisms. One of the biggest challenges of using silicon nanomaterials in the biological sector is the development of sensitive materials of low/acceptable toxicity for identifying target analytes either inside/outside the biological platforms. In this scenario, silicon‐based compound matrices can offer different characteristics and advantages depending on their size configurations and PL emission mechanisms. On the other hand, a proper understanding of these multifaceted silicon nanomaterials’ optical properties (emission mechanisms) can be exploited for pathogen detection and in situ applications in cells and tissues, embarking on a new era of bioimaging technology.