Recent decades have witnessed a revolution in oncological care and control, with new drug transport systems, advanced functional imaging, and next-generation biosensors. At the forefront of this revolution is the development of engineered hydrogels that intricately mimic the tumor microenvironment. These hydrogels are drawing significant attention in preclinical, diagnostic, and therapeutic applications in cancer. By integrating fluorescent agents, these hydrogels enable real-time tracking and enhanced imaging, paving the way for advancements in cancer diagnostics and therapeutic monitoring. Fluorescent hydrogel-based biosensors can monitor tumor bulk, assess tumor targeting by therapeutics, and distinguish between the initial and later effects of cancer treatment early in its progression. By encapsulating antibodies, biomarkers, or small molecules within fluorescent-labeled hydrogel structures, these systems achieve unprecedented levels of detection and imaging precision. Fluorescent hydrogels are also utilized to deliver chemotherapeutic drugs, immunosuppressants, hyperthermia-inducing agents, photodynamic therapy compounds, and other therapeutics, enabling localized, on-demand controlled release for cancer treatment and drug release monitoring. This review examines the methods for fluorescent labeling of hydrogels and explores the latest applications of fluorescent hydrogels in cancer treatment, biorecognition, and visualization. Finally, it discusses the primary challenges and potential future progression of fluorescent hydrogels for cancer management.