The field of molecular cages has attracted increasing interest in relation to the development of biological applications, as evidenced by the remarkable examples published in recent years. Two key factors have contributed to this achievement: First, the remarkable and adjustable host–guest chemical properties of molecular cages make them highly suitable for biological applications. This allows encapsulating therapeutic molecules to improve their properties. Second, significant advances have been made in synthetic methods to create water-soluble molecular cages. Achieving the necessary water solubility is a significant challenge, which in most cases requires specific chemical groups to overcome the inherent hydrophobic nature of the molecular cages which feature the organic components of the cage. This can be achieved by either incorporating water-solubilizing groups with negative/positive charges, polyethylene glycol chains, etc.; or by introducing charges directly into the cage structure itself. These synthetic strategies allow preparing water-soluble molecular cages for diverse biological applications, including cages’ anticancer activity, anticancer drug delivery, photodynamic therapy, and molecular recognition of biological molecules. In the review we describe selected examples that show the main concepts to achieve water solubility in molecular cages and some selected recent biological applications.