Biomolecular changes associated with cancer progression can be identified using Raman spectroscopy, allowing for this technique to be utilized as a non-invasive tool for the diagnosis of bladder cancer. Applications of Raman spectroscopy for diagnostics in real-time have consistently produced higher sensitivities and specificities than current clinical methods. This technique can be applied in vivo during bladder visualization (cystoscopic) procedures as an “optical biopsy” or in vitro to cells obtained from urine cytology specimens. This review follows the evolution of studies in this field from the first in vitro experiment to the most recent in vivo application, identifies how diagnostic algorithms are developed, and provides molecular information associated with the etiology of the biochemical continuum of disease progression. Future prospects for the application of Raman spectroscopy in bladder cancer diagnostics are also discussed.