Background: Oral premalignant lesions, such as leukoplakia, erythroplakia, oral submucous fibrosis, and lichen planus, are precursors to oral squamous cell carcinoma. Understanding the role of biomarkers in these lesions and the influence of restorative dental materials on their progression is essential for effective management and prevention. Objective: This study aimed to investigate the correlation between biomarkers in oral premalignant lesions and the biocompatibility of commonly used restorative dental materials. Methods: This study was conducted at Bacha Khan College of Dentistry, Mardan, Pakistan. A total of 56 participants diagnosed with oral premalignant lesions were recruited over six months. Tissue biopsies, blood, and saliva samples were analyzed for biomarkers, including p53, Ki-67, IL-6, TNF-alpha, ROS, and MMP-9. Restorative dental materials were evaluated for their biocompatibility based on cytotoxicity and inflammatory responses. Histopathological grading of lesions was conducted using hematoxylin and eosin (H&E) staining, while immunohistochemical staining assessed p53 and Ki 67 levels. Data were statistically analyzed to determine correlations between biomarkers, lesion severity, and dental material types. Results: Biomarkers such as Ki-67 (r = 0.71, p = 0.008) and p53 (r = 0.67, p = 0.012) showed strong correlations with lesion severity. Inflammatory markers and ROS levels were also significantly associated with advanced lesions. Among restorative materials, glass ionomer cements and zirconia-based restorations demonstrated superior biocompatibility compared to composite resins and amalgam. Conclusion: Biomarkers play a critical role in assessing lesion severity, and the choice of restorative materials significantly influences inflammatory responses. These findings highlight the need for biomarker-based diagnostics and careful material selection in managing oral premalignant lesions.