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<p>Quantum dots (QDs) are luminescent nanocrystals with rich surface chemistry and unique optical properties that make them useful as probes or carriers for traceable targeted delivery and therapy applications. QDs can be functionalized to target specific cells or tissues by conjugating them with targeting ligands. Recent advancement in making biocompatible QD formulations has made these nanocrystals suitable for <i>in vivo</i> applications. This review provides an overview of the preparation of QDs and their use as probes or carriers for traceable, targeted therapy of diseases <i>in vitro</i> and <i>in vivo</i>. More specifically, recent advances in the integration of QDs with drug formulations for therapy and their potential toxicity <i>in vitro</i> and <i>in vivo</i> are highlighted. The current findings and challenges for optimizing QD/drug formulations with respect to optimal size and stability, short-term and long-term toxicity, and <i>in vivo</i> applications are described. Lastly, we attempt to predict key trends in QD/drug formulation development over the next few years and highlight areas of therapy where their use may provide breakthrough results in the near future.</p>