Nanocrystals show promise to deliver poorly water-soluble drugs to yield systemic exposure. However, our knowledge regarding the in vivo fate of nanocrystals is in its infancy, as nanocrystallization is simply viewed as an approach to enhance the dissolution of drug crystals. The dying crystal phenomenon inspired the development of hybrid nanocrystals by physically embedding fluorophores into the crystal lattice. This approach achieved concurrent therapy and bioimaging and is well-established to study pharmacokinetics and nanocrystal dissolution in vivo. Nanocrystals also offer the advantage of long-term durability in the body for interacting with biological tissues and cells. This review introduces the hybrid nanocrystal technique, including the theoretical concepts, preparation, and applications. We also discuss the latest development in self-discriminative hybrid nanocrystals utilizing environment-responsive probes. This review will stimulate further development and application of nanocrystal-based drug delivery systems for theranostic strategies.