Plasma medicine is gaining increasing attention and is moving from basic research into clinical practice. While areas of application are diverse, much research has been conducted assessing the use of cold atmospheric pressure plasma (CAP) in wound healing and cancer treatment—two applications with entirely different goals. In wound healing, a tissue-stimulating effect is intended, whereas cancer therapy aims at killing malignant cells. In this review, we provide an overview of the latest clinical and some preclinical research on the efficacy of CAP in wound healing and cancer therapy. Furthermore, we discuss the current understanding of molecular signaling mechanisms triggered by CAP that grant CAP its antiseptic and tissue regenerating or anti-proliferative and cell death-inducing properties. For the efficacy of CAP in wound healing, already substantial evidence from clinical studies is available, while evidence for therapeutic effects of CAP in oncology is mainly from in vitro and in vivo animal studies. Efforts to elucidate the mode of action of CAP suggest that different components, such as ultraviolet (UV) radiation, electromagnetic fields, and reactive species, may act synergistically, with reactive species being regarded as the major effector by modulating complex and concentration-dependent redox signaling pathways.