Emerging new materials have always been key to building high-performance biosensors. Metal nanoclusters (MNCs) stabilized by water-soluble ligands, as promising and highly versatile sensing nanomaterials, have attracted considerable attention in recent years owing to their exceptional properties, including low toxicity, high sensitivity, improved selectivity, and excellent biocompatibility for diverse label-free chemical and biological detection applications. In this review, we briefly illustrate the main synthesis methods for water-soluble MNCs and then systematically and comprehensively summarize their applications in various detection fields, such as nucleic acids, proteins, small biomolecules, metal ions, and cancer cells. Through representative case examples, we elaborately highlight their sensing mechanisms, demonstrating that rationally designed MNC-based probes can achieve exceptionally low detection limits with wide linear dynamic ranges for metal ions, and can even reach ultrahigh sensitivity for biomolecules, underscoring their robust practical analytical potential. Finally, we outline the future development directions and challenges of MNCs in the detection field. We believe that this review will facilitate timely recognition of the importance of MNCs in biological detection and hopefully stimulate their future development.