In recent years, there has been an unprecedented expansion in the field of nanomedicine with the development of new nanoparticles for the diagnosis and treatment of cancer. Nanoparticles have unique biological properties given their small size and large surface area-to-volume ratio, which allows them to bind, absorb, and carry compounds such as small molecule drugs, DNA, RNA, proteins, and probes with high efficiency. Their tunable size, shape, and surface characteristics also enable them to have high stability, high carrier capacity, the ability to incorporate both hydrophilic and hydrophobic substances and compatibility with different administration routes, thereby making them highly attractive in many aspects of oncology. This review article will discuss how nanoparticles are able to function as carriers for chemotherapeutic drugs to increase their therapeutic index; how they can function as therapeutic agents in photodynamic, gene, and thermal therapy; and how nanoparticles can be used as molecular imaging agents to detect and monitor cancer progression. CA Cancer J Clin 2013;63:395-418. ©2013 American Cancer Society, Inc.