ZrO2 nanoparticles have received substantially increased attention in every field of life owing to their wide range of applications. Zirconium oxide is a commercially economical, non-hazardous, and sustainable metal oxide having diversified potential applications. ZrO2 NPs play a vast role in the domain of medicine and pharmacy such as anticancer, antibacterial, and antioxidant agents and tissue engineering owing to their reliable curative biomedical applications. In this review article, we address all of the medical and biomedical applications of ZrO2 NPs prepared through various approaches in a critical way. ZrO2 is a bio-ceramic substance that has received increased attention in biomimetic scaffolds owing to its high mechanical strength, excellent biocompatibility, and high chemical stability. ZrO2 NPs have demonstrated potential anticancer activity against various cancer cells. ZrO2-based nanomaterials have exhibited potential antibacterial activity against various bacterial strains and have also demonstrated excellent antioxidant activity. The ZrO2 nanocomposite also exhibits highly sensitive biosensing activity toward the sensing of glucose and other biological species.