Lanthanide-doped inorganic nanoparticles possess superior physicochemical features such as long-lived luminescence, large antenna-generated Stokes or anti-Stokes shifts, narrow emission bands, high resistance to photobleaching and low toxicity, and thus are regarded as a new generation of luminescent bioprobes as compared to conventional molecular probes like organic dyes and lanthanide chelates. These functional nanoparticles, although most of their bulk counterparts were well studied previously, have attracted renewed interest for their biomedical applications in areas as diverse as biodetection, bioimaging, and disease diagnosis and therapeutics. In this review, we provide a comprehensive survey of the latest advances made in developing lanthanide-doped inorganic nanoparticles as potential luminescent bioprobes, which covers areas from their fundamental chemical and physical features to bioapplications including controlled synthesis methodology, surface modification chemistry, optical spectroscopy, and their promising applications in diverse fields, with an emphasis on heterogeneous and homogeneous in vitro biodetection of tumor markers and multimodal bioimaging of various tumor tissues. Some future prospects and challenges in this rapidly growing field are also summarized.