This critical review will present the role of nanoparticles (NPs) in the directions that are vital to the new field of nanomedicine, including imaging and drug delivery. We reflect on the physical properties that make NPs advantageous for in vivo efficacy, and review recent advances in major NP based biomedical applications. Critical questions of transport, uptake, and clearance will be discussed and illustrated through the success and opportunities of NP imaging and therapy on a photodynamic therapy (PDT) based NP system that has been developed in our lab over the past decade (540 references).