The compact and versatile oxetane motifs have gained significant attention in drug discovery and medicinal chemistry campaigns. This review presents an overview of the diverse applications of oxetanes in clinical and preclinical drug candidates targeting various human diseases, including cancer, viral infections, autoimmune disorders, neurodegenerative conditions, metabolic disorders, and others. Special attention is given to biologically active oxetane-containing compounds and their disease-related targets, such as kinases, epigenetic and non-epigenetic enzymes, and receptors. The review also details the effect of the oxetane motif on important properties, including aqueous solubility, lipophilicity, pKa, P-glycoprotein (P-gp) efflux, metabolic stability, conformational preferences, toxicity profiles (e.g., cytochrome P450 (CYP) suppression and human ether-a-go-go related gene (hERG) inhibition), pharmacokinetic (PK) properties, potency, and target selectivity. We anticipate that this work will provide valuable insights that can drive future discoveries of novel bioactive oxetane-containing small molecules, enabling their effective application in combating a wide range of human diseases.