The present article presents a critically reviewed state of the art of naturally occurring and synthetically designed degradable polymer materials being invested for theranostic applications especially focused to controlled drug delivery and tissue engineering technologies. The review article highlights the origin, classification, properties and applications of a variety of naturally occurring charged biomacromolecules like alginic acid, pectin, xanthate gum, hylarunic acid, and chitosan and its derivatives. Moreover, synthetic polymers with degradation characteristics such as aliphatic polyesters, poly (orthoesters) etc, have also been addressed. The role of these polymers in theranostic applications has been emphasized specifically highlighting their use in controlled drug delivery and tissue engineering. An account of the present challenges and future prospects in this area has also been discussed.