Nanoparticles (NPs) have gained considerable interest from researchers and are ubiquitously known for their safety along efficacy compared to conventional formulations. Conventional formulations possess a non-targeted approach which leads to low therapeutic efficacy [1], [2], [3], [4], [5]. To overcome the drawback of conventional formulation, newer approaches have been explored to improve the potency of drug delivery. However, there are several problems associated with the nano-particulate drug delivery systems as they are foreign material to the body and due to this, they got quickly cleared from the body leading to poor deposition at the targeted site [6]. Additionally, NPs do not possess any inherited ability to detect disease microenvironments which could result in poor deposition patterns in targeted areas. These issues could be overcome by camouflaging the NPs with biologically cloaked membranes (BCM) also called as nano-ghost technique [7]. BCM possess properties of parent cells and are less likely to be identified by the immune system. Thus, they can provide targeted drug delivery along with prolonged circulation. These systems could sense the microenvironment of body and could provide an optimum focused delivery. NPs can be cloaked with natural cell membranes of erythrocytes, leukocytes, platelets, cancer cells, stem cells, bacterial cells, endothelial cells, pancreatic cells and immune cells that offer many advantages over conventional NPs like specific targeting, improved bioavailability, controlled release and as a consequence dosing frequency is reduced. They are designed by a top-down approach that straight away interacts with diseased states [8], [9], [10]. These NPs cloaked with various membranes could be used to target cancer, asthma, diabetes, atherosclerosis, bacterial infections etc., as shown in Fig. 1, which represents the detailed method of preparation of bio-membrane coated NPs [7], [11]. In this review, we have systematically described different types of cell membrane camouflaged NPs (CMcNPs) as well as the separation of the cell membrane from parent cells and the mechanism of coating along with its application. Moreover, a combination of variable cell membranes is used to employ hybrid membrane-cloaked NPs along with its applications and challenges have also been discussed. Later, Detailed applications along with problems associated with nanodecoys are discussed in detail.