Lipid nanoparticles (LNPs) have become a critical tool in modern medicine, particularly in diagnostics and therapy. Various synthesis techniques, including ultrasonication, high-pressure homogenization, solvent evaporation, and microemulsion, have been employed to produce LNPs with desired properties. Modification techniques such as surface functionalization, polymer coating, PEGylation, and ligand conjugation further enhance their efficacy and biocompatibility. This study highlights the recent advances in the application of LNPs for improving diagnostic accuracy and therapeutic outcomes. In diagnostics, LNPs enhance visualization, bioimaging, and analytical methods, especially through genomic, proteomic, and immunoassay-based techniques, as well as plasmonic biosensors. In therapy, LNPs are utilized in innovative treatments such as plasmonic photothermal and photodynamic therapies, antibacterial applications, and drug delivery systems. These LNPs serve as effective carriers for drugs, genes, and antibodies, improving targeted delivery and therapeutic efficacy. Despite their promising potential, challenges related to safety, scalability, and long-term impacts remain, and this research outlines future perspectives on overcoming these barriers to further integrate LNPs into clinical applications.