The vast regenerative potential of stem cells has laid the foundation for stem cell-based therapies. However, certain challenges limit the application of cell-based therapies. The therapeutic use of cell-free therapy can avoid limitations associated with cell-based therapies. Acellular stem cell-based therapies rely on the use of biological factors released by stem cells, including growth factors and extracellular vesicles such as exosomes. Due to their comparable regenerative potential, acellular therapies may provide a feasible and scalable alternative to stem cell-based therapies. Exosomes are small vesicles secreted by various types of cells, including stem cells. Exosomes contain parent cell-derived nucleic acids, proteins, lipids, and other bioactive molecules. They play an important role in intra-cellular communication and influence the biological characteristics of cells. Exosomes inherit the properties of their parent cells; therefore, stem cell-derived exosomes are of particular interest for applications of regenerative medicine. In comparison to stem cell-based therapy, exosome therapy offers several benefits, such as easy transport and storage, no risk of immunological rejection, and few ethical dilemmas. Unlike stem cells, exosomes can be lyophilized and stored off-the-shelf, making acellular therapies standardized and more accessible while reducing overall treatment costs. Exosome-based acellular treatments are therefore readily available for applications in patients at the time of care. The current review discusses the use of exosomes as an acellular therapy. The review explores the molecular mechanism of exosome biogenesis, various methods for exosome isolation, and characterization. In addition, the latest advancements in bioengineering techniques to enhance exosome potential for acellular therapies have been discussed. The challenges in the use of exosomes as well as their diverse applications for the diagnosis and treatment of diseases have been reviewed in detail.