Poly(N-isopropylacrylamide) (PNIPAM)-based thermosensitive hydrogels demonstrate great potential in biomedical applications. However, they have inherent drawbacks such as low mechanical strength, limited drug loading capacity and low biodegradability. Formulating PNIPAM with other functional components to form composited hydrogels is an effective strategy to make up for these deficiencies, which can greatly benefit their practical applications. This review seeks to provide a comprehensive observation about the PNIPAM-based composite hydrogels for biomedical applications so as to guide related research. It covers the general principles from the materials choice to the hybridization strategies as well as the performance improvement by focusing on several application areas including drug delivery, tissue engineering and wound dressing. The most effective strategies include incorporation of functional inorganic nanoparticles or self-assembled structures to give composite hydrogels and linking PNIPAM with other polymer blocks of unique properties to produce copolymeric hydrogels, which can improve the properties of the hydrogels by enhancing the mechanical strength, giving higher biocompatibility and biodegradability, introducing multi-stimuli responsibility, enabling higher drug loading capacity as well as controlled release. These aspects will be of great help for promoting the development of PNIPAM-based composite materials for biomedical applications.