Biomaterials are biologically compatible materials or formations that can be used to treat, augment or replace tissues in physiological environment. Biomaterials are hybrid structures or may be derived exclusively from synthetic and natural materials. Hydrogels on the other hand are three dimensional crosslinked polymeric networks and can imbibe large amount of water or biological fluids. Hydrogels are extensively used in biomedical areas for a range of unique properties like environment responsiveness, bioadhesive properties, biocompatibility and biodegradability. Biocompatable hydrogels are particularly advantageous in a number of areas like drug delivery, wound management, tissue engineering and organ transplant. This review make an attempt to present a systematic understanding on diverge chemistry and applications of biomaterial hydrogels as applied in pharmaceutical and biomedical arena.