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Nanotechnology has become very popular in the sensor fields in recent times. It is thought that the utilization of such technologies, as well as the use of nanosized materials, could well have beneficial effects for the performance of sensors. Nano-sized materials have been shown to have a number of novel and interesting physical and chemical properties. Low-dimensional nanometer-sized materials and systems have defined a new research area in condensed-matter physics within past decades. Apart from the aforesaid categories of materials, there exist various materials of different types for fabricating nanosensors. Carbon is called as a unique element, due to its magnificent applications in many areas. Carbon is an astonishing element that can be found many forms including graphite, diamond, fullerenes, and graphene. This review provides an overview of some of the important and recent developments brought about by the application of carbon based nanostructures to nanotechnology for both chemical and biological sensor development and their application in pharmaceutical and biomedical area.