With over 10 million new cases per year worldwide, Cancer remains one of the most urgent health concerns and a difficult disease to treat. For an effective treatment, improved diagnostic and therapeutic techniques with minimal side-effects are required. Research and development in the areas of nanoscience and nanotechnology promise to provide innovative and more effective approaches for early diagnosis, imaging and therapy. An emerging trend in this direction is Theranostics which represents a combinatorial diagnosis and therapeutic approach to cancer disease and aims to eliminate multi-step procedures, reduce delays in treatment and improves patient care. It offers various advantages like improved diagnosis, tumor specific delivery of drugs, reduced lethal effects to normal tissues etc. Theranostic nanomedicines like nanoshells, plasmonic nanobubbles, quantum dots etc. can be used effectively for achieving these goals. With the advances in nano-imaging and nano-therapy new avenues for the development of effective cancer treatment will be opened.