Multi-modal interpretation of biomedical images opens up novel opportunities in biomedical image analysis. Conventional AI approaches typically rely on disjointed training, i.e., Large Language Models (LLMs) for clinical text generation and segmentation models for target extraction, which results in inflexible real-world deployment and a failure to leverage holistic biomedical information. To this end, we introduce UniBiomed, the first universal foundation model for grounded biomedical image interpretation. UniBiomed is based on a novel integration of Multi-modal Large Language Model (MLLM) and Segment Anything Model (SAM), which effectively unifies the generation of clinical texts and the segmentation of corresponding biomedical objects for grounded interpretation. In this way, UniBiomed is capable of tackling a wide range of biomedical tasks across ten diverse biomedical imaging modalities. To develop UniBiomed, we curate a large-scale dataset comprising over 27 million triplets of images, annotations, and text descriptions across ten imaging modalities. Extensive validation on 84 internal and external datasets demonstrated that UniBiomed achieves state-of-the-art performance in segmentation, disease recognition, region-aware diagnosis, visual question answering, and report generation. Moreover, unlike previous models that rely on clinical experts to pre-diagnose images and manually craft precise textual or visual prompts, UniBiomed can provide automated and end-to-end grounded interpretation for biomedical image analysis. This represents a novel paradigm shift in clinical workflows, which will significantly improve diagnostic efficiency. In summary, UniBiomed represents a novel breakthrough in biomedical AI, unlocking powerful grounded interpretation capabilities for more accurate and efficient biomedical image analysis.