Recent research has looked to develop innovative and powerful novel biofunctionalized nanometer-sized silica particles, controlling and tailoring their properties in a very predictable manner to meet the needs of specific applications. The silica shells of these particles facilitate a wide variety of surface reactions and allow conjugation with biomolecules like proteins and DNA. There exist a multitude of possible applications of fabricated nanoparticles in biotechnology and medicine. In particular, they have proved to be highly useful for biosensing, assay labelling, bioimaging, and in research on a variety of molecular tags in cellular and molecular biology. Techniques commonly rely on the use of silica-coated semiconductor quantum dots, organic dyes, magnetic particles, and Raman active particles. Inorganic-biological hybrid particles combine the properties of both materials, i.e., the spectroscopic characteristics of the entrapped nanocrystal, and the biomolecular function of the conjugated entity. Rather than being exhaustive, this review focuses on selected examples to illustrate novel concepts and promising applications. Approaches described include the encoding of silica nanoparticles with different groups, and conjugation with various biological entities. Further, promising applications in bioanalysis are considered and discussed.