Nanotechnology, according to the National Nanotechnology Initiative (NNI), is defined as utilization of structure with at least one dimension of nanometer size for the construction of materials, devices or systems with novel or significantly improved properties due to their nano-size. The nanostructures are capable of enhancing the physical properties of conventional textiles, in areas such as anti-microbial properties, water repellence, soil-resistance, anti-static, anti-infrared and flame-retardant properties, dyeability, colour fastness and strength of textile materials. In the present work, zinc oxide nanoparticles were prepared by wet chemical method using zinc nitrate and sodium hydroxide as precursors and soluble starch as stabilizing agent. These nanoparticles, which have an average size of 40 nm, were coated on the bleached cotton fabrics (plain weave, 30 s count) using acrylic binder and functional properties of coated fabrics were studied. On an average of 75%, UV blocking was recorded for the cotton fabrics treated with 2% ZnO nanoparticles. Air permeability of the nano-ZnO coated fabrics was significantly higher than the control, hence the increased breathability. In case of nano-ZnO coated fabric, due to its nano-size and uniform distribution, friction was significantly lower than the bulk-ZnO coated fabric as studied by Instron® Automated Materials Testing System. Further studies are under way to evaluate wash fastness, antimicrobial properties, abrasion properties and fabric handle properties.