Indocyanine green (ICG), a near-infrared (NIR) fluorescent dye with unique photoluminescent properties, is a helpful tool in many medical applications. ICG produces fluorescence when excited by NIR light, enabling accurate tissue visualization and real-time imaging. This study investigates the fundamental processes behind ICG’s photoluminescence as well as its present and possible applications in treatments and medical diagnostics. Fluorescence-guided surgery (FGS) has been transformed by ICG’s capacity to visualize tumors, highlight blood flow, and facilitate lymphatic mapping, all of which have improved surgical accuracy and patient outcomes. Furthermore, the fluorescence of the dye is being studied for new therapeutic approaches, like photothermal therapy, in which NIR light can activate ICG to target and destroy cancer cells. We go over the benefits and drawbacks of ICG’s photoluminescent qualities in therapeutic contexts, as well as current studies that focus on improving its effectiveness, security, and adaptability. More precise disease detection, real-time monitoring, and tailored therapy options across a variety of medical specialties are made possible by the ongoing advancement of ICG-based imaging methods and therapies. In the main part of our work, we strive to take into account the latest reports; therefore, we used clinical articles going back to 2020. However, for the sake of the theoretical part, the oldest article used by us is from 1995.