Biodegradable nanoparticles (NPs) are gaining increased attention for their ability to serve as a viable carrier for site specific delivery of vaccines, genes, drugs and other biomolecules in the body. They offer enhanced biocompatibility, superior drug/vaccine encapsulation, and convenient release profiles for a number of drugs, vaccines and biomolecules to be used in a variety of applications in the field of medicine. In this manuscript, the methods of preparation of biodegradable NPs, different factors affecting optimal drug encapsulation, factors affecting drug release rates, various surface modifications of nanoparticles to enhance in-vivo circulation, distribution and multimodal functionalities along with the specific applications such as tumor targeting, oral delivery, and delivery of these particles to the central nervous system have been reviewed.