Phytochemicals or secondary metabolites are substances produced by plants that have been shown to have many biological activities, providing a scientific basis for using herbs in traditional medicine. In addition, the use of herbs is considered to be safe and more economical compared to synthetic medicine. However, herbal medicines have disadvantages, such as having low solubility, stability, and bioavailability. Some of them can undergo physical and chemical degradation, which reduces their pharmacological activity. In recent decades, nanotechnology-based herbal drug formulations have attracted attention due to their enhanced activity and potential for overcoming the problems associated with herbal medicine. Approaches using nanotechnology-based delivery systems that are biocompatible, biodegradable, and based on lipids, polymers, or nanoemulsions can increase the solubility, stability, bioavailability, and pharmacological activity of herbals. This review article aims to provide an overview of the latest advances in the development of nanotechnology-based herbal drug formulations for increased activity, as well as a summary of the challenges these delivery systems for herbal medicines face.