Regenerative medicine is a highly regarded multidisciplinary field that aims to transform the future of clinical medicine through curative strategies rather than palliative therapies. As an emerging field, the development of regenerative medicine cannot be achieved without multifunctional biomaterials. Among the various bioscaffold materials, hydrogels are one of the materials of interest in bioengineering and medical research because of their similarity to the natural extracellular matrix and good biocompatibility. However, conventional hydrogels have simple internal structures and single cross‐linking modes, which require improvement in a single function and structural stability. Introducing multifunctional nanomaterials into 3D hydrogel networks physically or chemically avoids their disadvantages. Nanomaterials (NMs) are materials in the size range of 1–100 nm with distinct physical and chemical properties that differ from that of the macroscopic size and enable hydrogels to exhibit multifunctionality. Although regenerative medicine and hydrogels have been well researched in their respective fields, the connection between nanocomposite hydrogels (NCHs) and regenerative medicine has not been elaborated. Therefore, this review briefly describes the preparation and design requirements of NCHs and discusses their applications and challenges in regenerative medicine, hoping to clarify the relationship between the two.