Hydrogels play a crucial role due to their high-water content and 3D structure, which make them ideal for various applications in biomedicine, sensing, and beyond. They can be prepared from a variety of biomaterials, polymers, and their combinations, allowing for versatility in properties and applications. Hydrogels include natural types derived from collagen, gelatin, alginate, and hyaluronic acid, as well as synthetic types based on polyethylene glycol (PEG), polyvinyl alcohol (PVA), and polyacrylamide (PAAm). Each type possesses distinct properties, such as mechanical strength, biodegradability, and biocompatibility, which can be tailored for applications such as wound healing, contact lenses, 3D bioprinting, and tissue engineering. The high-water content of hydrogels mimics natural tissue environments, promoting cell growth and allowing nutrient and waste exchange, which supports the development of functional tissues. They serve as scaffolds in tissue engineering applications, including wound healing, cartilage and bone regeneration, vascular tissue engineering, and organ-on-a-chip systems. Additionally, hydrogels can encapsulate and deliver therapeutic agents, such as growth factors or drugs, to specific target sites in the body. Hydrogels can be prepared through three primary methods: physical crosslinking, which relies on non-covalent interactions such as physical entanglements or hydrogen bonding; chemical crosslinking, which forms covalent bonds between polymer chains to create a stable structure; and irradiation-based crosslinking, where UV irradiation induces rapid hydrogel formation. The choice of crosslinking method depends on the desired properties and applications of the hydrogel. By providing a biomimetic environment, hydrogels facilitate cell growth and differentiation, support tissue formation, and aid in the regeneration of damaged or diseased tissues while delivering therapeutic agents. This review focuses on the critical advancements in processing routes for hydrogel development, summarizing the characterization and application of hydrogels. It also details key applications, including wound healing and cartilage and bone regeneration, as well as the challenges and future perspectives in the field.