The development of functional nanoprobes and nanomedicines has long been a focal point in the realm of precision cancer therapeutics. A particularly noteworthy and promising trend in current research involves integrating diagnostic methods and treatment techniques within a single nanosystem. The luminescence phenomenon known as aggregation-induced emission (AIE) has garnered substantial attention in disease diagnosis. Recently, quite a few AIE fluorogens (AIEgens) have been developed as photothermal or photodynamic photosensitizers (PSs) for anticancer phototherapy. Particularly, the aggregation-dependent luminescent feature of AIEgens has natural correlations with the assembly construction of nanomedicines. With a variety of AIEgen-based nanosystems devised for cancer diagnosis and therapy in recent years, it is timely to delineate the latest advancements in this field at the intersection of AIE and biomedical nanotechnology. This review will concentrate on the emerging AIEgen-functionalized nanotherapeutics, encompassing AIEgen-illuminated nanoprobes for tumor-specific imaging and AIEgen-functionalized nanomedicines for cancer therapy. Also, we discuss the prospects and challenges in the clinical translation of AIE-functionalized nanomedicines.