Mineral oil resources are dwindling and the mineral-based lubricants are not compatible with the environment, and thus there is great interest in replacing them with bio-based lubricants. Automotive engines are an important application for bio-lubricants. In this context, this review investigates recent advances and research gaps in automotive-related applications of bio-based lubricants. The main objective of the current article is to review the tribological and thermophysical properties of nanoparticles in bio-oils, which could be used as a reference in the future development of bio-lubricants. The various nanomaterials, concentrations, surfactants, and mixing techniques have been presented. The key mechanisms which can result in superior tribological and thermal behavior of bio-lubricants are explained. Studies on the tribo-chemical reactions and between nano-additives and bio-oils are included in this review. It was reported that the tribological and thermophysical performance of bio-oils could be improved especially after adding nanomaterials according to the recent studies results. Furthermore, the major challenges for developing bio-lubricants performance are illustrated. Our present review assists in providing a basis to select bio-oils, nano-additives, and chemical processing according to their tribological properties.