Cold plasma generated in an open environment with a temperature nearly around room temperature has recently been a topic of great importance. It has unlocked the door of plasma application in a new direction: biomedical applications. Cold atmospheric pressure (CAP) plasma comprises various neutral and charged reactive species, UV radiations, electric current/fields etc., which have several impactful effects on biological matter. Some of the significant biological effects of CAP plasma are inactivation of microorganism, stimulation of cell proliferation and tissue regeneration, destruction of cells by initializing apoptosis etc. Although the detailed mechanism of action of plasma on biomaterials is still not completely understood, some basic principles are known. Studies have indicated that the reactive oxygen species and nitrogen species (ROS, RNS) play a crucial role in the observed biological effects. In this perspective, this chapter first provides a brief discussion on the fundamentals of CAP plasma and its generation methods. Then a discussion on the optical diagnostics methods to characterize the plasma is provided. Optical emission spectroscopy (OES) is used to identify the reactive species and to measure their relative concentration. Other important plasma parameters such as gas temperature, electron/excitation temperature and electron density measurement methods using OES have also been discussed. Then a discussion on the application of CAP plasma in biomedical field is provided. A thorough understanding of biochemical reaction mechanisms involving highly reactive plasma species will further improve and extend CAP plasma technology in biomedical applications.