Self-healing hydrogels represent a transformative class of smart biomaterials that have garnered considerable attention in pharmaceutical and biomedical applications due to their unique capacity to autonomously repair structural damage while maintaining functional integrity. These intelligent polymeric networks combine the favorable characteristics of conventional hydrogels—including high water content, biocompatibility, and tissue-mimetic properties—with autonomous self-repair capabilities mediated through dynamic chemical interactions. This comprehensive review examines the fundamental principles, classification systems, and self-healing mechanisms of these innovative materials, with particular emphasis on their application as sustained drug delivery platforms. We critically analyze the dynamic covalent and non-covalent bonding mechanisms that confer self-healing properties, including Schiff base linkages, hydrogen bonding networks, host-guest complexation, and electrostatic interactions. The rheological characteristics, mechanical performance, and injectability of self-healing hydrogels are discussed in the context of their pharmaceutical utility. Furthermore, we evaluate drug loading methodologies, encapsulation efficiencies, and release kinetics that govern therapeutic efficacy. The review encompasses diverse biomedical applications spanning wound management, tissue engineering, oncological therapeutics, and localized drug delivery systems. Critical consideration is given to biocompatibility profiles, toxicological assessments, manufacturing scalability, and regulatory pathways toward clinical translation. Finally, we identify knowledge gaps in current research and propose future perspectives for advancing self-healing hydrogel technology from laboratory investigation to clinical implementation. This scholarly analysis provides a comprehensive foundation for researchers, clinicians, and pharmaceutical scientists engaged in the development of next-generation drug delivery systems.