Stereoscopic displays can potentially improve many aspects of medicine. However, weighing the advantages and disadvantages of such displays remains difficult, and more insight is needed to evaluate whether stereoscopic displays are worth adopting. In this article, we begin with a review of monocular and binocular depth cues. We then apply this knowledge to examine how stereoscopic displays can potentially benefit diagnostic imaging, medical training, and surgery. It is apparent that the binocular depth information afforded by stereo displays 1) aid the detection of diagnostically relevant shapes, orientations, and positions of anatomical features, especially when monocular cues are absent or unreliable; 2) help novice surgeons orient themselves in the surgical landscape and perform complicated tasks; and 3) improve the three-dimensional anatomical understanding of students with low visual-spatial skills. The drawbacks of stereo displays are also discussed, including extra eyewear, potential three-dimensional misperceptions, and the hurdle of overcoming familiarity with existing techniques. Finally, we list suggested guidelines for the optimal use of stereo displays. We provide a concise guide for medical practitioners who want to assess the potential benefits of stereo displays before adopting them.