Functional hydrogels are used for numerous biomedical applications such as tissue engineering, wound dressings, lubricants, contact lenses and advanced drug delivery systems. Most of them are based on synthetic or natural polymers forming a three-dimensional network that contains aqueous media. Among synthetic polymers, poly(meth)acrylates, polyethyleneglycols, poly(vinylalcohols), poly(vinylpyrrolidones), PLGA and poly(urethanes) are of high relevance, whereas natural polymers are mainly polysaccharides such as hyaluronic acid, alginate or chitosan and proteins such as albumin, collagen or elastin. In contrast to most synthetic polymers, natural polymers are biodegradable. Both synthetic and natural polymers are often chemically modified in order to improve or induce favorable properties and functions like high mechanical strength, stiffness, elasticity, high porosity, adhesive properties, in situ gelling properties, high water binding capacity or drug release controlling properties. Within this review we provide an overview about the broad spectrum of biomedical applications of functional hydrogels, summarize innovative approaches, discuss the concept of relevant functional hydrogels that are in clinical trials and highlight advanced products as examples for successful developments.