The article discusses the development and potential benefits of multifunctional nanoparticles, which combine targeting and imaging capabilities to improve drug delivery and therapeutic efficacy. While clinically approved nanoparticles have shown value in reducing drug toxicity, their use has not always translated into improved clinical outcomes. The addition of targeting and imaging functionalities to nanoparticles aims to enhance their effectiveness and patient outcomes. However, this comes with increased complexity, costs, and regulatory hurdles. The article reviews the advantages and challenges of these multifunctional nanoparticles, focusing on their potential in improving the efficacy of small-molecule anti-cancer drugs. It highlights the importance of passive targeting through enhanced permeability and retention (EPR) and active targeting mediated by affinity ligands. The article also explores the challenges of developing receptor-specific targeted nanoparticles, including the need for precise ligand-receptor interactions, the potential for off-target effects, and the complexity of nanoparticle design. Additionally, it discusses the benefits and limitations of combining therapeutic and diagnostic functions in theranostic nanoparticles, emphasizing the trade-offs between imaging and therapeutic efficacy. The article concludes by highlighting the ongoing debate and the need for further research to optimize the design and clinical translation of multifunctional nanoparticles.The article discusses the development and potential benefits of multifunctional nanoparticles, which combine targeting and imaging capabilities to improve drug delivery and therapeutic efficacy. While clinically approved nanoparticles have shown value in reducing drug toxicity, their use has not always translated into improved clinical outcomes. The addition of targeting and imaging functionalities to nanoparticles aims to enhance their effectiveness and patient outcomes. However, this comes with increased complexity, costs, and regulatory hurdles. The article reviews the advantages and challenges of these multifunctional nanoparticles, focusing on their potential in improving the efficacy of small-molecule anti-cancer drugs. It highlights the importance of passive targeting through enhanced permeability and retention (EPR) and active targeting mediated by affinity ligands. The article also explores the challenges of developing receptor-specific targeted nanoparticles, including the need for precise ligand-receptor interactions, the potential for off-target effects, and the complexity of nanoparticle design. Additionally, it discusses the benefits and limitations of combining therapeutic and diagnostic functions in theranostic nanoparticles, emphasizing the trade-offs between imaging and therapeutic efficacy. The article concludes by highlighting the ongoing debate and the need for further research to optimize the design and clinical translation of multifunctional nanoparticles.