Smart polymers—also known as stimuli-responsive polymers—represent one of the most revolutionary materials in modern pharmaceutics. These polymers can sense environmental triggers such as pH, temperature, enzymes, redox potential, or magnetic fields, and alter their physical or chemical behavior in response. This responsiveness allows the controlled and targeted release of drugs precisely where and when they are needed, maximizing therapeutic efficacy and minimizing systemic side effects. This review explores the classification, mechanisms, formulation approaches, biomedical applications, and regulatory considerations of smart polymer-based drug delivery systems. The discussion emphasizes advances in cancer therapy, diabetes management, and tissue engineering, along with the challenges of large-scale manufacturing and clinical translation.