Wearable physiological parameter monitoring devices play an increasingly important role in daily health monitoring and disease diagnosis/treatment due to their continuous dynamic and low physiological/psychological load characteristics. After decades of development, wearable technologies have gradually matured, and research has expanded to clinical applications. This paper reviews the research progress of wearable physiological parameter monitoring technology and its clinical applications. Firstly, it introduces wearable physiological monitoring technology’s research progress in terms of sensing technology and data processing and analysis. Then, it analyzes the monitoring physiological parameters and principles of current medical-grade wearable devices and proposes three specific directions of clinical application research: 1) real-time monitoring and predictive warning, 2) disease assessment and differential diagnosis, and 3) rehabilitation training and precision medicine. Finally, the challenges and response strategies of wearable physiological monitoring technology in the biomedical field are discussed, highlighting its clinical application value and clinical application mode to provide helpful reference information for the research of wearable technology-related fields.