Osteosarcoma (OSA) is a type of bone cancer that begins in the cells that form bones. OSA is a rare mesenchymal bone neoplasm derived from mesenchymal stem cells. Genome disorganization, chromosomal modifications, deregulation of tumor suppressor genes, and DNA repair defects are the factors most responsible for OSA development. Despite significant advances in the diagnosing and treatment of OSA, patients’ overall survival has not improved within the last twenty years. Lately, advances in modern nanotechnology have spurred development in OSA management and offered several advantages to overcome the drawbacks of conventional therapies. This technology has allowed the practical design of nanoscale devices combined with numerous functional molecules, including tumor-specific ligands, antibodies, anti-cancer drugs, and imaging probes. Thanks to their small sizes, desirable drug encapsulation efficiency, and good bioavailability, functionalized nanomaterials have found wide-spread applications for combating OSA progression. This review invokes the possible utility of engineered nanomaterials in OSA diagnosis and treatment, motivating the researchers to seek new strategies for tackling the challenges associated with it.