Currently researchers are intensely exploring the potential of polymer coated inorganic nanoparticles as materials of immense importance in context to theranostic applications, that implies a combination of diagnostic and therapeutic applications into a single tool. This enables early detection of a disease with the help of biomarkers, and treatment via improved biodistribution and targeted drug delivery in a kinetically controlled manner. Gold nanoparticles (AuNP) have often been the material of choice due to some specific advantages associated with them, e.g. ease of synthesis and surface functionalization, low toxicity and tunable optical properties. Surface grafting of the nanoparticles with polymers have been practiced widely in order to prevent their aggregation, forming stable core-shell nanostructures. Additionally, biofunctionalities like enzymes, peptides, nucleic acids, antibodies, etc have often been introduced for specific recognition of the diseased cells, followed by targeted release of the encapsulated drug. RAFT polymerization being one of the most versatile of controlled polymerization techniques, has been extensively used for surface grafting on the AuNPs to form polymer-AuNP nanohybrids systems. This review aims at highlighting some of the most interesting research works reported on RAFT synthesized polymer-grafted AuNP over the last decade and their potential usefulness in context to different biomedical applications.