In this overview, the applicability of X-ray diffraction line profile analysis (XLPA) for the characterization of the microstructure in nanostructured materials is overviewed. The dislocation densities obtained by whole pattern fitting and from the breadth of the diffraction peaks are compared. Both theoretical considerations and experimental evidences prove that the evaluation of the peak breadth solely is not suitable for the determination of the dislocation density. In addition, the microstructural parameters determined by XLPA were compared to the values obtained directly by microscopic methods. It was found that the ratio of the grain size obtained by microscopy and the crystallite size determined by XLPA decreases with the reduction of the grain size in nanomaterials, and below $$\sim $$
∼
20 nm, the two values agree within the experimental error. In addition, correlation between the microstructural parameters (e.g., crystallite size and dislocation density) determined by XLPA was not found. It was revealed that bottom–up processing methods can produce similarly high defect density in nanostructured materials as severe plastic deformation (SPD). The influence of stacking fault energy, melting point, and degree of alloying on the microstructure of nanomaterials is discussed in detail.