Liquid−liquid phase separation (LLPS) has emerged as a fundamental organizational principle in biological systems. A wide variety of engineered coacervates have been developed to investigate the mechanisms underlying liquid−liquid phase separation. However, the broader application potential of these coacervates has received comparatively little attention. In this Review, we present engineered coacervates as an emerging class of liquid biomaterials, beginning by highlighting their most distinctive and biomedically relevant properties: liquidity, molecular enrichment, the ability to maintain liquid stability against moderate dilution and the capability to reach hard-to-access locations. We further detail fabrication strategies that harness the supramolecular toolbox to construct engineered coacervates that meet strict biomaterial requirements. We then outline how these liquid biomaterials can be applied across diverse biomedical contexts — including drug delivery, tissue engineering, bioadhesion and antimicrobial applications — to address challenges that remain intractable with conventional approaches. Despite their great promise, key challenges remain in elucidating design principles that ensure the structural integrity and functionality of engineered coacervates within complex biological environments and in identifying the biomedical scenarios in which their advantages can be most prominently demonstrated. Overall, this Review outlines the potential of engineered coacervates as emerging liquid biomaterials for meeting pressing biomedical needs and aims to inspire broader interest and engagement from the research community. Although liquid–liquid phase separation (LLPS) is a fundamental biological principle, the potential of LLPS-driven engineered coacervates remains largely untapped. This Review reframes coacervates as powerful liquid biomaterials, detailing how their unique properties can be harnessed for diverse biomedical applications.