Polyhydroxyalkanoates (PHAs) have attracted great interest in recent years in research due to their potential wide applicability as biomaterials. However, PHAs are very hydrophobic, degrade slowly under physiological conditions, and lack chemical functionalities. These factors restrict the scope of their applications in the biomedical field. In order to expand on the use of these materials, many other properties such as mechanical strength, surface features, amphiphilicity, and degradation rate have to be modified to match the requirements of specific applications. Chemical modifications to introduce functional groups add valuable attributes to PHAs that cannot be easily achieved by bioconversion processes. These chemically modified PHAs, possessing improved properties, can be utilized as multifunctional materials. In this review, well-established chemical modification methods of PHAs are summarized and discussed. Furthermore, the biomedical significance of the functionalized PHAs in different applications is also discussed.