Cancer remains a leading cause of mortality worldwide despite the development of novel, precise, and less invasive strategies for diagnosis, prognosis, and treatment. Encapsulated within different extracellular vesicles (EVs), especially exosomes, extracellular RNAs (exRNAs) have become important players in disease pathogenesis and intercellular communication. They are perfect candidates for liquid biopsies because of their stability, ubiquity in biofluids, and capacity to replicate the physiological and pathological conditions of parental cells. The growing role of exRNAs as “theranostic agents” in cancer, combining diagnostic, prognostic, and therapeutic capabilities, is thoroughly explored in this review. We investigate their potential as non-invasive biomarkers for tumor classification, early detection, and disease progression or recurrence prediction. Furthermore, we discuss the expanding therapeutic potential of exRNAs, which is frequently made possible by engineered exosome platforms and ranges from delivering therapeutic RNA molecules to inhibiting oncogenic exRNAs. Finally, we also highlight the current challenges in exRNA research, such as targeted delivery, standardization, isolation, and characterization, and we outline potential future directions for integrating exRNA-based theranostics into standard clinical practice for better cancer patient care.