As a sustainable replacement for fossil fuels, biodiesel is a game-changer in the energy sector. There is no strategy to minimize biodiesel's significance as a sustainable, clean fuel source in light of the increasing climate change and environmental sustainability concerns. Nevertheless, conventional biodiesel production methods often run into problems like inadequate conversion efficiency and inappropriate fuel properties, which impede their broad adoption. The revolutionary potential of nanotechnology to circumvent these limitations and revolutionize biodiesel consumption and production is explored in this review paper. There are new possibilities for improving biodiesel output and engine efficiency, thanks to nanotechnology, which can alter matter at the atomic and molecular levels. Using nano-catalysts, nano-emulsification processes, and nano-encapsulation procedures, researchers have made significant advances in improving biodiesel qualities such as stability, combustion efficiency, and viscosity. Through a comprehensive analysis of current literature and research data, this article elucidates the crucial role of nanotechnology in advancing biodiesel technology. By shedding light on the most current advancements, challenges, and potential future outcomes in nano-based biodiesel manufacturing and consumption, this review hopes to add to the growing corpus of knowledge in the field and inspire additional innovation. In conclusion, there is great hope for a sustainable energy future, increased economic growth, and reduced environmental impacts through the application of nanotechnology.