Increasing customer demand for durable and functional apparel manufactured in a sustainable manner has created an opportunity for nanomaterials to be integrated into textile substrates. Nanomoieties can induce stain repellence, wrinkle-freeness, static elimination, and electrical conductivity to fibers without compromising their comfort and flexibility. Nanomaterials also offer a wider application potential to create connected garments that can sense and respond to external stimuli via electrical, color, or physiological signals. This review discusses electronic and photonic nanotechnologies that are integrated with textiles and shows their applications in displays, sensing, and drug release within the context of performance, durability, and connectivity. Risk factors including nanotoxicity, nanomaterial release during washing, and environmental impact of nanotextiles based on life cycle assessments have been evaluated. This review also provides an analysis of nanotechnology consolidation in the textiles market to evaluate global trends and patent coverage, supplemented by case studies of commercial products. Perceived limitations of nanotechnology in the textile industry and future directions are identified.