Safe and clean water is of pivotal importance to all living species and the ecosystem on earth. However, the accelerating economy and industrialization of mankind generate water pollutants with much larger quantity and higher complexity than ever before, challenging the efficacy of traditional water treatment technologies. The flourishing researches on nanomaterials and nanotechnologies in the past decade have generated new understandings on many fundamental processes and brought revolutionary upgrades to various traditional technologies in almost all areas, including water treatment. An indispensable step toward the real application of nanomaterials in water treatment is to confine them in large processable substrate to address various inherent issues, such as spontaneous aggregation, difficult operation and potential environmental risks. Strikingly, when the size of the spatial restriction provided by the substrate is on the order of only one or several nanometers, referred to as nanoconfinement, the phase behavior of matter and the energy diagram of a chemical reaction could be utterly changed. Nevertheless, the relationship between such changes under nanoconfinement and their implications for water treatment is rarely elucidated systematically. In this Critical Review, we will briefly summarize the current state-of-the-art of the nanomaterials, as well as the nanoconfined analogues (i.e., nanocomposites) developed for water treatment. Afterward, we will put emphasis on the effects of nanoconfinement from three aspects, that is, on the structure and behavior of water molecules, on the formation (e.g., crystallization) of confined nanomaterials, and on the nanoenabled chemical reactions. For each aspect, we will build the correlation between the nanoconfinement effects and the current studies for water treatment. More importantly, we will make proposals for future studies based on the missing links between some of the nanoconfinement effects and the water treatment technologies. Through this Critical Review, we aim to raise the research attention on using nanoconfinement as a fundamental guide or even tool to advance water treatment technologies.