Metal nanoclusters, composed of several to a few hundred metal atoms, have received worldwide attention due to their extraordinary physical and chemical characteristics. Recently, great efforts have been devoted to the exploration of the potential diagnostic and therapeutic applications of metal nanoclusters. Here we focus on the recent advances and new horizons in this area, and introduce the rising progress on the use of metal nanoclusters for biological analysis, biological imaging, therapeutic applications, DNA assembly and logic gate construction, enzyme mimic catalysis, as well as thermometers and pH meters. Furthermore, the future challenges in the construction of biofunctional metal nanoclusters for diagnostic and therapeutic applications are also discussed. We expect that the rapidly growing interest in metal nanocluster-based theranostic applications will certainly not only fuel the excitement and stimulate research in this highly active field, but also inspire broader concerns across various disciplines.