The interaction of substrate surfaces with the environment (moisture, heat, pressure, chemicals) has cascade effects on their efficiency, performance, durability due to their susceptibility towards microbial adhesion, spontaneous leaching, impairment, corrosion etc. Many scientific, technological innovations such as smart coating have been discovered for the protection of these surfaces. It is a high‐tech, high value coating capable of responding to environmental impulses. Incorporation of nanofillers, nanomatrices in smart coating improve surface performance by extending service life, provide high durability, high physical coverage, adhesive strength etc. Real‐time monitoring of environmental conditions, structural health could be made possible by sensing coatings. This review predominantly highlights the essential features, design, advancements, applications of smart nanocoatings over elementary nanocoatings. To cover the whole study, drawbacks of traditional coating methods are also discussed. Finally, the research gaps, future perspectives of smart nanocoatings will be overlooked.