Increasing efficiency is an important driving force behind cellular organization and often achieved through compartmentalization. Long recognized as a core principle of eukaryotic cell organization, its widespread occurrence in prokaryotes has only recently come to light. Despite the early discovery of a few microcompartments such as gas vesicles and carboxysomes, the vast majority of these structures in prokaryotes are less than 100 nm in diameter - too small for conventional light microscopy and electron microscopic thin sectioning. Consequently, these smaller-sized nanocompartments have therefore been discovered serendipitously and then through bioinformatics shown to be broadly distributed. Their small uniform size, robust self-assembly, high stability, excellent biocompatibility, and large cargo capacity make them excellent candidates for biotechnology applications. This review will highlight our current knowledge of nanocompartments, the prospects for applications as well as open question and challenges that need to be addressed to fully understand these important structures.