Understanding complex interactions in biomedical networks is crucial for advancements in biomedicine, but traditional link prediction (LP) methods are limited in capturing this complexity. Representation-based learning techniques improve prediction accuracy by mapping nodes to low-dimensional embeddings, yet they often struggle with interpretability and scalability. We present BioPathNet, a novel graph neural network framework based on the Neural Bellman-Ford Network (NBFNet), addressing these limitations through path-based reasoning for LP in biomedical knowledge graphs. Unlike node-embedding frameworks, BioPathNet learns representations between node pairs by considering all relations along paths, enhancing prediction accuracy and interpretability. This allows visualization of influential paths and facilitates biological validation. BioPathNet leverages a background regulatory graph (BRG) for enhanced message passing and uses stringent negative sampling to improve precision. In evaluations across various LP tasks, such as gene function annotation, drug-disease indication, synthetic lethality, and lncRNA-mRNA interaction prediction, BioPathNet consistently outperformed shallow node embedding methods, relational graph neural networks and task-specific state-of-the-art methods, demonstrating robust performance and versatility. Our study predicts novel drug indications for diseases like acute lymphoblastic leukemia (ALL) and Alzheimer’s, validated by medical experts and clinical trials. We also identified new synthetic lethality gene pairs and regulatory interactions involving lncRNAs and target genes, confirmed through literature reviews. BioPathNet's interpretability will enable researchers to trace prediction paths and gain molecular insights, making it a valuable tool for drug discovery, personalized medicine and biology in general.