IgE-mediated allergies represent a major health problem in the modern world. Apart from allergen-specific immunotherapy (AIT), the only disease-modifying treatment, researchers focus on biologics that target different key molecules such as allergens, IgE, or type 2 cytokines to ameliorate allergic symptoms. Single-domain antibodies, or nanobodies, are the newcomers in biotherapeutics, and their huge potential is being investigated in various research fields since their discovery 30 years ago. While they are dominantly applied for theranostics of cancer and treatment of infectious diseases, nanobodies have become increasingly substantial in allergology over the last decade. In this review, we discuss the prerequisites that we consider to be important for generating useful nanobody-based drug candidates for treating allergies. We further summarize the available research data on nanobodies used as allergen monitoring and detection probes and for therapeutic approaches. We reflect on the limitations that have to be addressed during the development process, such as in vivo half-life and immunogenicity. Finally, we speculate about novel application formats for allergy treatment that might be available in the future.