The importance of the cladoceran Daphnia as a model organism for ecotoxicity testing has been well-established since the 1980s. Daphnia have been increasingly used in standardised testing of chemicals as they are well characterised and show sensitivity to pollutants, making them an essential indicator species for environmental stress. The mapping of the genomes of D. pulex in 2012 and D. magna in 2017 further consolidated their utility for ecotoxicity testing, including demonstrating the responsiveness of the Daphnia genome to environmental stressors. The short lifecycle and parthenogenetic reproduction make Daphnia useful for assessment of developmental toxicity and adaption to stress. The emergence of nanomaterials (NMs) and their safety assessment has introduced some challenges to the use of standard toxicity tests which were developed for soluble chemicals. NMs have enormous reactive surface areas resulting in dynamic interactions with dissolved organic carbon, proteins and other biomolecules in their surroundings leading to a myriad of physical, chemical, biological, and macromolecular transformations of the NMs and thus changes in their bioavailability to, and impacts on, daphnids. However, NM safety assessments are also driving innovations in our approaches to toxicity testing, for both chemicals and other emerging contaminants such as microplastics (MPs). These advances include establishing more realistic environmental exposures via medium composition tuning including pre-conditioning by the organisms to provide relevant biomolecules as background, development of microfluidics approaches to mimic environmental flow conditions typical in streams, utilisation of field daphnids cultured in the lab to assess adaption and impacts of pre-exposure to pollution gradients, and of course development of mechanistic insights to connect the first encounter with NMs or MPs to an adverse outcome, via the key events in an adverse outcome pathway. Insights into these developments are presented below to inspire further advances and utilisation of these important organisms as part of an overall environmental risk assessment of NMs and MPs impacts, including in mixture exposure scenarios.