Studies of nanosized forms of bismuth (Bi)-containing materials have recently expanded from optical, chemical, electronic, and engineering fields towards biomedicine, as a result of their safety, cost-effective fabrication processes, large surface area, high stability, and high versatility in terms of shape, size, and porosity. Bi, as a nontoxic and inexpensive diamagnetic heavy metal, has been used for the fabrication of various nanoparticles (NPs) with unique structural, physicochemical, and compositional features to combine various properties, such as a favourably high X-ray attenuation coefficient and near-infrared (NIR) absorbance, excellent light-to-heat conversion efficiency, and a long circulation half-life. These features have rendered bismuth-containing nanoparticles (BiNPs) with desirable performance for combined cancer therapy, photothermal and radiation therapy (RT), multimodal imaging, theranostics, drug delivery, biosensing, and tissue engineering. Bismuth oxyhalides (BiOx, where X is Cl, Br or I) and bismuth chalcogenides, including bismuth oxide, bismuth sulfide, bismuth selenide, and bismuth telluride, have been heavily investigated for therapeutic purposes. The pharmacokinetics of these BiNPs can be easily improved via the facile modification of their surfaces with biocompatible polymers and proteins, resulting in enhanced colloidal stability, extended blood circulation, and reduced toxicity. Desirable antibacterial effects, bone regeneration potential, and tumor growth suppression under NIR laser radiation are the main biomedical research areas involving BiNPs that have opened up a new paradigm for their future clinical translation. This review emphasizes the synthesis and state-of-the-art progress related to the biomedical applications of BiNPs with different structures, sizes, and compositions. Furthermore, a comprehensive discussion focusing on challenges and future opportunities is presented.