Nanofluid-enhanced oil recovery (EOR) technology is an innovative approach to enhancing oil production in oilfields. It entails the dispersion of nanoparticles within a fluid, strategically utilizing the distinctive properties of these nanoparticles (NPs) to engage with reservoir rocks or crude oil, resulting in a significant enhancement of the oil recovery rate. Despite the notable advantages of nanofluid EOR technology over conventional oil recovery methods such as binary and ternary flooding, practical implementations continue to grapple with a range of pressing challenges. These challenges encompass concerns regarding the economic viability, stability, and adaptability of nanomaterials, which pose significant barriers to the widespread adoption of nanofluid EOR technology in the oil field. To tackle these challenges, addressing the current issues may involve selecting simpler and more readily available materials coupled with straightforward material modification techniques. This approach aims to more effectively meet the requirements of large-scale on-site applications. Within this framework, this review systematically explores commonly employed nanofluids in recent years, including inorganic nanofluids, organic nanofluids, and composite nanofluids. It categorizes the research advancements in optimizing modification techniques and provides a comprehensive overview of the mechanisms that underpin nanofluid EOR technology and its practical applications in oilfields. This comprehensive review aims to offer valuable references and serve as a solid foundation for subsequent research endeavors.