At present, nanotechnology is a priority in research in several nations due to its massive capability and financial impact. However, due to the uncertainties and abnormalities in shape, size, and chemical compositions, the existence of certain nanomaterials may lead to dangerous effects on the human health and environment. The present review includes the different advanced applications of nanomaterials in textiles industries, as well as their associated environmental and health risks. The four main textile industry fields using nanomaterials, nanofinishing, nanocoatings, nanofibers, and nanocomposites, are analyzed. Different functional textiles with nanomaterials are also briefly reviewed. Most textile materials are in direct and prolonged contact with our skin. Hence, the influence of carcinogenic and toxic substances that are available in textiles must be comprehensively examined. Proper recognition of the conceivable benefits and accidental hazards of nanomaterials to our surroundings is significant for pursuing its development in the forthcoming years. The conclusions of the current paper are anticipated to increase awareness on the possible influence of nanomaterial-containing textile wastes and the significance of better regulations in regards to the ultimate disposal of these wastes.