Sustainable socio-economic development largely depends on the sustainability of the energy supply from economic, environmental, and public health perspectives. Fossil fuel combustion only meets the first element of this equation and is hence rendered unsustainable. Biofuels are advantageous from a public health perspective, but their environmental and economic sustainability might be questioned considering the conflicts surrounding their feedstocks, including land use change and fuel vs. food conflict. Therefore, it is imperative to put more effort into addressing the downsides of biofuel production using advanced technologies, such as nanotechnology. In light of that, this review strives to scrutinize the latest developments in the application of nanotechnology in producing biodiesel, a promising alternative to fossil diesel with proven environmental and health benefits. The main focus is placed on nanotechnology applications in the feedstock production stage. First, the latest findings concerning the application of nanomaterials as nanofertilizers and nanopesticides to improve the performance of oil crops are presented and critically discussed. Then, the most promising results reported recently on applying nanotechnology to boost biomass and oil production by microalgae and facilitating microalgae harvesting are reviewed and mechanistically explained. Finally, the promises held by nanomaterials to enhance animal fat production in livestock, poultry, and aquaculture systems are elaborated. Despite the favorable features of using nanotechnology in biodiesel feedstock production, the presence of nanoparticles in living systems is also associated with important health and environmental challenges, which are critically covered and discussed in this work.