The constantly developing field of protein-functionalized nanoparticles seems to be the future of medicine, as was proved by the Nobel Prize in 2022 for the development of “click chemistry”. This method offers enormous possibilities for developing strategies for functionalizing nanoparticles with proteins. We scrutinize this field by exploring the latest advancements, methodologies, and applications in imaging, diagnostics, cancer treatment, and drug delivery. The research involves a comprehensive review of diverse strategies for functionalization, including in situ surface modification, post-synthesis techniques, and emerging click chemistry covalent and non-covalent coupling methods. Additionally, our review involves the importance of active targeting uptake. The flexibility and adaptability of PFNPs present encouraging prospects for numerous medical domains, notwithstanding the various obstacles encountered in implementing the solutions discussed. Our review highlights the need for further development to increase the universal applications of protein-functionalized nanoparticles while summarizing the remarkable advancements in this field.