Cosmetics have always been in demand across the globe among people of all age groups. In the modern cosmetic world, nanostructured materials have proven hugely advantageous in producing cosmeceuticals or ‘nano-cosmeceuticals’ and various beauty products. The application of nanostructured materials in cosmetic products possesses some challenges in terms of short- and long-term safety and environmental issues, despite their growing popularity. The nanostructured particles in cosmeceuticals provide a targeted route of administration due to their high penetrability, site selectivity, high effectiveness, prolonged activity, and drug encapsulation potential. However, standard methods for toxicity evaluation may not be relevant for cosmeceuticals, leading to the need for an alternative methodology. This review article compiles detailed descriptions of all significant aspects of nanostructured materials in the cosmetics industry, which include the synthesis and characterization of relevant nanostructured materials for cosmeceuticals, state-of-the-art practices, mechanisms for the synthesis of advanced materials, toxicological concerns in terms of health risks in humans, and environmental concerns. Also, a proposal for new approaches in terms of regulatory measures to mitigate these problems has been suggested. The primary focus of this article is to provide a comprehensive outlook on this subject area and contribute to the exploration of new prospects and emerging roles of nanostructured materials in the cosmetics industry.