Most of drug entities face the problems like reduced absorption, faster metabolism and elimination, toxicity because of drug distribution to other tissues, low drug solubility, unpredictable bioavailability, etc. These issues need to be work out so as to make the novel drug delivery systems for successful therapy. Use of nanotechnology is one of the promising strategies to overcome all of these problems. Distinctive properties of nanomaterials like smaller particles size, high surface area, and ease of suspending in liquids, deeper access across the cells and organelles, flexib le optical and magnetic properties are offered by nanoparticles as compared to other micro or macro sized particles. Nanomaterials can be classified into different categories based on their drug delivery system, dimensions, structure and consistency. Various types of nano-formulations (such as nanoparticles, nano-suspension, liposomes, hydrogels, solid lipid nanoparticles, dendrimers, microneedles, ocular insert/disk, transcorneal iontophoresis) have been used by the researchers for modulating the physicochemical properties and biological activities of the drugs. This review highlights the various types of nanomaterials with their advantages and applications in the pharmaceuticals for enhanced physicochemical properties and better biological activities with reduced toxicity and higher biocompatibility .