Quantum dots (QDs), nanoscale semiconductor crystals, have emerged as a revolutionary class of nanomaterials with unique optical and electrochemical properties, making them highly promising for applications in disease diagnosis and treatment. Their tunable emission spectra, long-term photostability, high quantum yield, and excellent charge carrier mobility enable precise control over light emission and efficient charge utilization, which are critical for biomedical applications. This article provides a comprehensive review of recent advancements in the use of quantum dots for disease diagnosis and therapy, highlighting their potential and the challenges involved in clinical translation. Quantum dots can be classified based on their elemental composition and structural configuration. For instance, IB-IIIA-VIA group quantum dots and core-shell structured quantum dots are among the most widely studied types. These classifications are essential for understanding their diverse functionalities and applications. In disease diagnosis, quantum dots have demonstrated remarkable potential due to their high brightness, photostability, and ability to provide precise biomarker detection. They are extensively used in bioimaging technologies, enabling high-resolution imaging of cells, tissues, and even individual biomolecules. As fluorescent markers, quantum dots facilitate cell tracking, biosensing, and the detection of diseases such as cancer, bacterial and viral infections, and immune-related disorders. Their ability to provide real-time, in vivo tracking of cellular processes has opened new avenues for early and accurate disease detection. In the realm of disease treatment, quantum dots serve as versatile nanocarriers for targeted drug delivery. Their nanoscale size and surface modifiability allow them to transport therapeutic agents to specific sites, improving drug bioavailability and reducing off-target effects. Additionally, quantum dots have shown promise as photosensitizers in photodynamic therapy (PDT). When exposed to specific wavelengths of light, quantum dots interact with oxygen molecules to generate reactive oxygen species (ROS), which can selectively destroy malignant cells, vascular lesions, and microbial infections. This targeted approach minimizes damage to healthy tissues, making PDT a promising strategy for treating complex diseases. Despite these advancements, the translation of quantum dots from research to clinical application faces significant challenges. Issues such as toxicity, stability, and scalability in industrial production remain major obstacles. The potential toxicity of quantum dots, particularly to vital organs, has raised concerns about their long-term safety. Researchers are actively exploring strategies to mitigate these risks, including surface modification, coating, and encapsulation techniques, which can enhance biocompatibility and reduce toxicity. Furthermore, improving the stability of quantum dots under physiological conditions is crucial for their effective use in biomedical applications. Advances in surface engineering and the development of novel encapsulation methods have shown promise in addressing these stability concerns. Industrial production of quantum dots also presents challenges, particularly in achieving consistent quality and scalability. Recent innovations in synthesis techniques and manufacturing processes are paving the way for large-scale production, which is essential for their widespread adoption in clinical settings. This article provides an in-depth analysis of the latest research progress in quantum dot applications, including drug delivery, bioimaging, biosensing, photodynamic therapy, and pathogen detection. It also discusses the multiple barriers hindering their clinical use and explores potential solutions to overcome these challenges. The review concludes with a forward-looking perspective on the future directions of quantum dot research, emphasizing the need for further studies on toxicity mitigation, stability enhancement, and scalable production. By addressing these critical issues, quantum dots can realize their full potential as transformative tools in disease diagnosis and treatment, ultimately improving patient outcomes and advancing biomedical science.