Chemical sensors are now essential in environmental monitoring and medical diagnostics, as they offer immediate, sensitive, and specific detection of many chemical substances. These sensors play a vital role in detecting pollutants, overseeing the quality of air and water, and guaranteeing compliance with environmental regulations. The incorporation of cutting-edge materials, nanotechnology, and microfabrication processes has greatly enhanced the capabilities of sensors, allowing for the accurate and dependable detection of minute impurities. Chemical sensors are used in environmental applications to monitor volatile organic compounds (VOCs), heavy metals, and particulate matter. These sensors are crucial for evaluating air quality and determining the effects of industrial activity on ecosystems. The utilisation of wireless sensor networks and Internet of Things (IoT) technologies has augmented the capacity of these sensors to offer extensive and uninterrupted environmental data. Chemical sensors are revolutionising medical diagnostics by significantly impacting illness detection and patient monitoring. These sensors are specifically engineered to identify distinct biomarkers linked to a range of health disorders, such as diabetes, cancer, cardiovascular illnesses, and infectious diseases. Advancements in wearable and implanted chemical sensors have facilitated the continuous monitoring of health, providing instantaneous information on physiological factors such as glucose levels, pH, and electrolyte balance. Continuous monitoring is especially advantageous for the management of chronic illnesses and the optimisation of individualised treatment strategies. The integration of nanomaterials and biorecognition elements in biosensor technology has significantly improved the precision and sensitivity of chemical sensors, enabling the early and precise detection of diseases. This study presents a thorough examination of the many categories of chemical sensors, their operational principles, and their specific uses in environmental and medical diagnostics. The text explores different sensor technologies, such as electrochemical, optical, and mass-sensitive sensors, emphasising their individual strengths and weaknesses. The paper also addresses the difficulties linked to the advancement of chemical sensors, such as the requirement for enhanced selectivity, stability, and miniaturisation. The text explores the future possibilities in the sector, highlighting the potential of combining material science, biotechnology, and data analytics to develop advanced sensors using interdisciplinary techniques. The combination of new materials, biotechnology, and data analytics is recognised as a crucial factor in driving innovation in chemical sensor technologies. The report emphasises the significance of ongoing research and development to overcome current obstacles and fully exploit the capabilities of chemical sensors in improving environmental protection and healthcare outcomes. The incorporation of these sensors into intelligent systems and wearable technologies is expected to have a pivotal impact on the progress of public health and environmental sustainability.