The infectious severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2) is the causative agent for coronavirus disease 2019 (COVID-19). Globally, there have been millions of infections and fatalities. Unfortunately, the virus has been persistent and a contributing factor is the emergence of several variants. The urgency to combat COVID-19 led to the identification/development of various diagnosis (polymerase chain reaction and antigen tests) and treatment (repurposed drugs, convalescent plasma, antibodies and vaccines) options. These treatments may treat mild symptoms and decrease the risk of life-threatening disease. Although these options have been fairly beneficial, there are some challenges and limitations, such as cost of tests/drugs, specificity, large treatment dosages, intravenous administration, need for trained personal, lengthy production time, high manufacturing costs, and limited availability. Therefore, the development of more efficient COVID-19 diagnostic and therapeutic options are vital. Nanobodies (Nbs) are novel monomeric antigen-binding fragments derived from camelid antibodies. Advantages of Nbs include low immunogenicity, high specificity, stability and affinity. These characteristics allow for rapid Nb generation, inexpensive large-scale production, effective storage, and transportation, which is essential during pandemics. Additionally, the potential aerosolization and inhalation delivery of Nbs allows for targeted treatment delivery as well as patient self-administration. Therefore, Nbs are a viable option to target SARS-CoV-2 and overcome COVID-19. In this review we discuss (1) COVID-19; (2) SARS-CoV-2; (3) the present conventional COVID-19 diagnostics and therapeutics, including their challenges and limitations; (4) advantages of Nbs; and (5) the numerous Nbs generated against SARS-CoV-2 as well as their diagnostic and therapeutic potential.