This review first gives an overview on the concept of fractal geometry with definitions and explanations of the most fundamental properties of fractal structures and processes like self-similarity, power law scaling relationship, scale invariance, scaling range and fractal dimensions. Having laid down the grounds of the basics in terminology and mathematical formalism, the authors systematically introduce the concept and methods of monofractal time series analysis. They argue that fractal time series analysis cannot be done in a conscious, reliable manner without having a model capable of capturing the essential features of physiological signals with regard to their fractal analysis. They advocate the use of a simple, yet adequate, dichotomous model of fractional Gaussian noise (fGn) and fractional Brownian motion (fBm). They demonstrate the importance of incorporating a step of signal classification according to the fGn/fBm model prior to fractal analysis by showing that missing out on signal class can result in completely meaningless fractal estimates. Limitation and precision of various fractal tools are thoroughly described and discussed using results of numerical experiments on ideal monofractal signals. Steps of a reliable fractal analysis are explained. Finally, the main applications of fractal time series analysis in biomedical research are reviewed and critically evaluated.