Albumin is a biocompatible, non-immunogenic and versatile drug carrier system. It has been widely used to extend the half-life, enhance stability, provide protection from degradation and allow specific targeting of therapeutic agents to various disease states. Understanding the role of albumin as a drug delivery and distribution system has increased remarkably in the recent years from the development of albumin-binding prodrugs to albumin as a drug carrier system. The extraordinary surface property of albumin makes it possible to bind various endogenous and exogenous molecules. This review succinctly deals with several albumin-drug conjugates and nanoparticles along with their preparation techniques and focuses on surface-modified albumin and targeting of albumin formulation to specific organs and tissues. It also summarizes research efforts on albumin nanoparticles used for delivering drugs to tumor cells and describes their role in permeation through tumor vasculature and in receptor mediated endocytosis, which is also described in this review. The versatility of albumin and ease of preparation makes it a suitable drug carrier system, swhich is the major objective of this review.