Nanosensors are currently gaining immense attraction in industry due to high sensitivity and specificity. In order to detect and measure chemical and physical properties in nanoscale region the sensor and analyte should have maximum surface area of interaction. The large surface to volume ratio offered by nanostructures has increased the search of nanomaterials that are compatible with biological and ecological systems. Unique optical, piezoelectric, semiconducting and electrochemical properties of ZnO makes it a potential candidate to be a multifunctional biological sensing device. Moreover facile fabrication methods, easy availability of precursors, low cost, low temperature processing, no toxicity, biodegradability and biocompatibility has made ZnO nanomaterial a good choice to work on. This paper reviews the current analysis on ZnO biosensors, their types in medical diagnosis, transduction mechanism of detection and future scope of biosensors in medical diagnosis.