The convergence of nano and biotechnology is enabling scientific and technical knowledge for improving human well being. Carbon nanotubes have become most fascinating material to be studied and unveil new avenues in the field of nanobiotechnology. The nanometer size and high aspect ratio of the CNTs are the two distinct features, which have contributed to diverse biomedical applications. They have captured the attention as nanoscale materials due to their nanometric structure and remarkable list of superlative and extravagant properties that encouraged their exploitation for promising applications. Significant progress has been made in order to overcome some of the major hurdles towards biomedical application of nanomaterials, especially on issues regarding the aqueous solubility/dispersion and safety of CNTs. Functionalized CNTs have been used in drug targeting, imaging, and in the efficient delivery of gene and nucleic acids. CNTs have also demonstrated great potential in diverse biomedical uses like drug targeting, imaging, cancer treatment, tissue regeneration, diagnostics, biosensing, genetic engineering and so forth. The present review highlights the possible potential of CNTs in diagnostics, imaging and targeted delivery of bioactives and also outlines the future opportunities for biomedical applications.