The unique physicochemical properties of MoS2 nanocomposites have drawn escalation in attention for the diagnosis and therapy of cancer. Mostly the 2D forms of MoS2 find application in sensing, catalysis, and theranostics, where it was traditionally applied in lubrication and battery industries as electrodes or intercalating agents. As nanostructures, MoS2 has a very high surface-to-volume ratio, and that helps in the engineering of structures and surfaces to promote absorption of a wide range of therapeutics and biomolecules through covalent or non-covalent interaction. This surface engineering provides excellent colloidal stability to MoS2 and makes them ideal nanomedicines with higher selectivity, sensitivity, and biomarker sensing ability. Furthermore, MoS2 exhibits exceptionally well optical absorption of NIR radiation and photothermal conversion, which helps in the NIR-responsive release of payloads in photothermal and photodynamic therapy. There are several reports that the fabricated MoS2 nanomedicines can selectively counter the tumor microenvironment, which leads to the accumulation of therapeutics or imaging agents in the diseased tissues to improve the therapeutic effects decreasing the adverse effects on the healthy cells. An overview of the basic structure and properties of MoS2 is presented in this article, along with an elaborative description of its morphology. At the same time, an attempt was made in this review to summarize the latest developments in the MoS2 structure, surface engineering, and nanocomposite formulations for improving biocompatibility, bioavailability, biomolecular sensing, and theranostic applications.