Zinc oxide nanoparticles have become one of the most popular metal oxide nanoparticles and recently emerged as a promising potential candidate in the fields of optical, electrical, food packaging, and biomedical applications due to their biocompatibility, low toxicity, and low cost. They have a role in cell apoptosis, as they trigger excessive reactive oxygen species (ROS) formation and release zinc ions (Zn2+) that induce cell death. The zinc oxide nanoparticles synthesized using the plant extracts appear to be simple, safer, sustainable, and more environmentally friendly compared to the physical and chemical routes. These biosynthesized nanoparticles possess strong biological activities and are in use for various biological applications in several industries. Initially, the present review discusses the synthesis and recent advances of zinc oxide nanoparticles from plant sources (such as leaves, stems, bark, roots, rhizomes, fruits, flowers, and seeds) and their biomedical applications (such as antimicrobial, antioxidant, antidiabetic, anticancer, anti-inflammatory, photocatalytic, wound healing, and drug delivery), followed by their mechanisms of action involved in detail. This review also covers the drug delivery application of plant-mediated zinc oxide nanoparticles, focusing on the drug-loading mechanism, stimuli-responsive controlled release, and therapeutic effect. Finally, the future direction of these synthesized zinc oxide nanoparticles’ research and applications are discussed.