The disposal of non-degradable plastics is augmented exponentially as a result of poor recycling efficacy. The development of biodegradable plastics has become indispensable in last two decades because of its origin from renewable resources. The potential interest in biodegradable plastics involves eco-friendly obliteration via microbial action which transform into carbon dioxide and water resulting pollution free natural system. Even though its lucrative interest lies in multiple areas, some of the properties such as brittleness, poor thermal, mechanical and low gas barrier properties restrict their practical uses. Incorporation of nanoparticle in polymer matrix or by making nanocomposites overcomes the shortcomings of the biodegradable polymers. For further improving the aforementioned properties, several approaches have been utilized especially incorporation of nanoparticle in polymer matrix to prepare nanocomposites. One of the great advantages of nanoparticles is to tune the rate of biodegradation (both increase and decrease as compared to the rate of pure polymer) depending upon the need. Thus, chemical, physical and biological properties of the biodegradable polymers can be modified and controlled for sustainable application in medical and other areas. This review considers the major concerns about the type of biodegradable polyesters and their nanocomposites, great details about mechanism of biodegradation, factors influencing the biodegradation and their applications in biomedical and packaging industries.