Thyroid cancer, the most prevalent cancer of the endocrine system and cervical region, has experienced a significant increase in incidence over recent decades. Nanomedicine has fundamentally revolutionized cancer treatment, particularly through the development of multifunctional nano-therapeutics. The progress in this field has been facilitated by the distinctive properties of nanomaterials, such as their capacity to perform several functions, be modified, and offer various detection methods. These features allow for non-invasive and practical diagnostic techniques through versatile imaging. Surface engineering plays a pivotal role in the design of multifunctional nano-systems for localized drug delivery against thyroid cancer. Nano-systems can be customized via surface modification techniques, such as functionalization with targeting ligands and inclusion of therapeutic drugs. This customization allows the nano-systems to specifically target cancer cells while reducing the impact on non-target cells. As a result, bovine serum albumin-coated nanostructures have emerged as powerful diagnostic and targeting nanosystems for thyroid cancer. This targeted strategy enhances the effectiveness of cancer treatment while reducing overall body toxicity. This comprehensive review aims to provide an extensive overview of the latest advancements in surface-engineered nanoparticle-based approaches for both diagnosing and treating thyroid cancer. It highlights the promising research endeavors aimed at creating novel and effective multifunctional nanomedicine for localized delivery to thyroid cancer sites. The review examines different nanomedicines that have been developed for cancer treatment and diagnosis. It also analyzes the current trends, future possibilities, and obstacles in this rapidly advancing sector. By synthesizing the current state of knowledge on surface-engineered multifunctional nano-systems, this review contributes to a better understanding of their potential applications in thyroid cancer treatment and paves the way for future research directions in this promising field of nanomedicine.