Cancer continues to represent a major global health burden, necessitating the development of more precise and effective therapeutic strategies. Conventional chemotherapy, although widely used, is associated with significant limitations including systemic toxicity, poor selectivity, unfavorable pharmacokinetics, and the emergence of multidrug resistance. Targeted drug delivery systems (TDDS) have emerged as a transformative approach to address these shortcomings by enhancing tumor-specific drug accumulation while minimizing off-target effects. This review comprehensively discusses recent advances in targeted drug delivery systems for cancer therapy, focusing on formulation strategies, pharmacological mechanisms, and clinical applications. Various nanocarrier platforms—including lipid-based systems, polymeric nanoparticles, inorganic nanomaterials, and biomimetic carriers—are critically analyzed in terms of design principles, drug loading capacity, surface functionalization, and targeting efficiency. Mechanistic insights into cellular uptake pathways, intracellular trafficking, resistance modulation, and tumor microenvironment responsiveness are elaborated to highlight their contribution to improved therapeutic outcomes. Clinically approved targeted formulations such as liposomal chemotherapeutics, albumin-bound nanoparticles, and antibody–drug conjugates demonstrate the translational potential of nanomedicine in oncology. Despite these advancements, challenges including tumor heterogeneity, variability of the enhanced permeability and retention effect in humans, immunogenicity, large-scale manufacturing constraints, and regulatory complexities remain significant barriers. Future perspectives emphasize personalized nanomedicine, artificial intelligence-assisted nanoparticle design, combination therapeutic approaches, and theranostic systems integrating diagnosis and therapy. Continued interdisciplinary innovation and translational research are essential to optimize targeted drug delivery platforms and advance precision oncology. KEYWORDS Targeted drug delivery systems; Cancer therapy; Nanomedicine; Liposomes; Polymeric nanoparticles; Antibody–drug conjugates; Tumor microenvironment; Enhanced permeability and retention effect; Stimuli-responsive systems; Personalized nanomedicine