Nanogels and nanoparticles are made of a cross-linked water-swellable polymeric network, can swell or shrink in response to environmental stimuli, and therefore have been exploited for their use in delivering drugs at the target site. Their outstanding properties, such as biocompatibility, biodegradability, small size, stability, tunable amphiphilicity, permeation ability, and responsiveness to external stimuli make them captivating in the field of biomedical applications. Nanogels now have gained tremendous attention due to these significant characteristics that can be altered easily for their use in biomedical as a drug delivery system, diagnostic, or theragnostic system. This review demonstrates the diverse modification and fabrication of nanogels for their responsiveness to different stimuli, temperature, pH, sunlight, magnet, etc. for achieving maximum therapeutic efficacy, designing the theragnostic system, and additional biomedical applications. We begin with the application of nanogels for targeted drug delivery via active and passive mechanisms, followed by the development of stimuli-responsive nanogels for controlled drug release. The advancement of the use of nanogels for diagnosis and imaging by the development of multifunctional hybrid nanogel is also highlighted. Finally, current challenges and future perspectives of designing nanogels for their application in biomedical are discussed.