Nanotechnology has emerged as a field with promising applications in building materials. Nanotechnology-based mortars are examples of such building materials that have widespread applications in the construction industry. The main nanomaterials used in mortars include nano-silica, nano-magnesium oxide, nano-alumina, nano-titanium oxide, nano-zinc oxide, nano-clay, and nano-carbon. This review paper presents a summary of the properties and effects of these nanomaterials on cement mortar in terms of its fresh-state and hard-state properties. The fresh-state properties include the setting time, consistency, and workability, while the hard-state properties include mechanical properties such as compressive, flexural, tensile strengths, as well as the elasticity modulus, in addition to durability properties such as water absorption, shrinkage strain, strength loss due to freeze–thaw cycles, and chloride penetration, among others. Different nanomaterials cause different physical and chemical alterations within the microstructures of cement mortar. Therefore, the microstructural characterization and densification of mortar are discussed in detail at varying temperatures. In general, the involvement of nanomaterials in cement mortar influences the fresh-state properties, enhances the mechanical properties, and impacts the durability properties, while reducing the porosity present in the mortar matrix. Cementitious nanomaterials can create a pathway for the easy injection of binding materials into the internal microstructures of a hydration gel to impact the hydration process at different rates, whereas their non-cementitious counterparts can act as fillers. Furthermore, the research gaps and future outlook regarding the application of nanomaterials in mortar are discussed.