Cells and their derivatives, including exosomes, are garnering heightened attention from researchers for their potential to diagnose, treat, and prevent human diseases. This interest arises from their capacity to precisely replicate complex cellular functions, thereby broadening the scope of biomedical applications. To introduce novel or enhanced functionalities, the development of innovative modification techniques is essential. Genetic engineering adeptly preserves the intrinsic properties of cells and their derivatives while concurrently enhancing and optimizing their functions. This review underscores cellular-level genetic engineering strategies and their applications in biomedical fields, highlighting the innovative techniques and their potential impact on medicine, including drug delivery and immunotherapy, with the goal of inspiring additional innovative approaches to advance biomedicine.