Polyurethane is a multipurpose polymer with indispensable physical characteristics and technical uses, such as films/coatings, fibers, and foams. The inclusion of nanoparticles in the polyurethane matrix has further enhanced the properties and potential of this important polymer. Research in this field has led to the design and exploration of polyurethane foams and polyurethane nanocomposite foams. This review article reflects vital aspects related to the fabrication, features, and applications of polyurethane nanocomposite foams. High-performance nanocellular polyurethanes have been produced using carbon nanoparticles such as graphene and carbon nanotubes. Enhancing the amounts of nanofillers led to overall improved nanocomposite foam features and performances. Subsequently, polyurethane nanocomposite foams showed exceptional morphology, electrical conductivity, mechanical strength, thermal stability, and other physical properties. Consequently, multifunctional applications of polyurethane nanocomposite foams have been observed in shape memory, electromagnetic interference shielding, and biomedical applications.