Although originally developed for the textile industry, polyanhydrides have found extensive use in biomedical applications due to their biodegradability and excellent biocompatibility. Polyanhydrides are most commonly synthesized from diacid monomers by polycondensation. Efficient control over various physicochemical properties, such as biodegradability and biocompatibility, can be achieved for this class of polymers, due to the availability of a wide variety of diacid monomers as well as by copolymerization of these monomers. Biodegradation of these polymers takes place by the hydrolysis of the anhydride bonds and the polymer undergoes predominantly surface erosion, a desired property to attain near zero-order drug release profile. This review examines the mode of degradation and elimination of these polyanhydrides in vivo as well as the biocompatibility and toxicological aspects of various polyanhydrides.