As pivotal mediators of intercellular communication, exosomes play a crucial role in transferring cellular cargo and regulating various biological functions. These extracellular vesicles encapsulate a diverse array of biomolecules, including nucleic acids, proteins, and lipids, which can serve as biomarkers for precise monitoring of physiological and pathological processes. Remarkably, exosomes derived from stem cells are densely packed with bioactive molecules that enable precise and selective intercellular communication, effectively dampen inflammatory responses, and actively drive tissue repair and regeneration. These attributes underscore their immense potential as a next-generation, cell-free therapeutic modality. Beyond their therapeutic potential, exosomes, characterized by their nanoscale size and excellent biocompatibility, serve as natural delivery vehicles for small molecules, proteins, and nucleic acids, making them highly suitable for targeted drug delivery and precision medicine applications. In this review, we provide a comprehensive analysis of the latest advancements in the clinical applications of exosomes, encompassing both diagnostic and therapeutic perspectives. Additionally, we critically assess the current limitations hindering their clinical translation and explore the potential of engineered exosomes in treating a wide range of diseases.