Surface functionalization of NPs is considered a prerequisite for their biomedical applications. In general, an ideal surface of NPs should provide good water stability and chemical functionality for further functionalization and maintain the NPs' unique physical and chemical properties. Through the approaches discussed here, ligand exchange involves a simple process without affecting the particles size. However, it often compromises the stability of the NPs, as the ligands tend to dissociate from the surface, leading to particle aggregation. In the case of QDs, the dissociation of the ligand can result in decreasing the fluorescence efficiency. Coating NPs with a hydrophilic layer, SiO2 shell, or polymer layer results in better stability and multifunctional properties (e.g., luminescent MNPs). The drawback, however, is that encapsulation increases the particle size significantly. On the other hand, different bioconjugation strategies have been developed to efficiently engineer NPs in interacting targeted biological molecules/systems. The covalent bioconjugation approach is probably the most common bioconjugation method as it forms stable linkages. Biological affinity through antibody/antigen conjugation offers highly specific interaction. Recently, small protein-mediated conjugation shows high selectivity in the interaction between NPs and biological systems. With further development in the surface functionalization and bioconjugation of NPs with enhanced chemical and physical properties, it is expected that new biomedical devices made of engineered NPs with miniaturized structures but multifunctional properties can have a significant impact on personal health care. ©2014IEEE.