Recent times, graphene and its derivatives have drawn considerable interest encompassing multi-domains to extend our understanding of the physical world. As part of the greater spectrum of biomedicine, one such use veers towards “theranostics”. Because of their unusual physicochemical properties, graphene oxide nanocomposites, graphene oxide, and its reduced derivatives veil our view. They exhibit ultra-high surface area suitable for bio-conjugation and also as a chassis for gene as well as drug delivery systems. In vivo photothermal therapy serves as a viable alternative treatment for tumors due to the near-infrared (NIR) optical absorbance range of graphene. Further, it may lead to imaging guided cancer therapy and multimodal cancer therapy due to the optical and magnetic properties of the functional nanocomposites. Nanographene on the other hand is amenable to being loaded with a variety of inorganic nanoparticles. The toxicological profile of functional graphene nano-formulates indicates that the toxicity, biodistribution, and excretion of the functional material are dependent upon the size and surface structure chemistry of the materials. The smaller size of nanographene material contributes towards better administration without any disruption to the excretory pathway or excess toxicity on the animal model. The chapter details the progress in the field of theranostics with an express attention to the future prospects and challenges in application of graphene-based materials to deal with cancer.