Rare earth elements, with their distinctive electronic configurations and abundant physicochemical properties, are endowed with remarkable magnetic, optical, and catalytic properties. These characteristics, in turn, play a crucial role in advancing biomedical research and applications. The two-dimensional (2D) spatial structure has a profound impact on the magnetic, optical, and electronic properties of materials. Consequently, 2D materials have attracted extensive research interest in recent years. Rare earth-based two-dimensional materials (RE-2DMs), emerging from the effective integration of rare earth elements and 2D structure, offer boundless possibilities for biomedical research. In this review, we summarize concisely the relevant preparation methods of RE-2DMs. We also explore how the 2D structure modulates the optical, magnetic, and catalytic properties of rare-earth-related materials. Moreover, we review the research and applications in biomedical imaging, therapy, and sensing and monitoring, which capitalize on the unique property characteristics of RE-2DMs. Finally, we look ahead to the challenges and opportunities for the development of these materials in the biomedical field. We anticipate that this review will effectively deepen the understanding of RE-2DMs in the context of biomedicine, thereby providing valuable support for the research and design of such materials in the biomedical domain.