The global energy crisis, environmental degradation and diminishing fossil fuel reserves have amplified the demand for sustainable energy alternatives. Biofuels derived from renewable resources offer a promising solution; however, their large-scale adoption is limited by challenges such as high production costs, scalability issues and low efficiency. This review examines the role of nanotechnology in overcoming these barriers by enhancing biofuel production processes. Nanostructured materials, renowned for their high surface area and catalytic efficiency are employed to optimize critical stages such as the pre-treatment of biomass, enzymatic hydrolysis and transesterification. This review emphasizes the utilization of advanced nanomaterials, including metal oxides, magnetic nanoparticles, carbon nanotubes and acid-functionalized nanoparticles, in improving production efficiency and enabling the use of non-edible feedstocks. These innovations not only boost economic viability but also reduce environmental remediation. Although these advantages exist, concerns related to nanoparticle toxicity, environmental safety and economic feasibility remain significant, necessitating future research. The review offers a comprehensive comparison of nanomaterial types, evaluates their performance in various stages of biofuel production and highlights their potential for industrial-scale application-providing fresh insights for future development. In this review, we provide a comprehensive analysis of nanotechnology-driven advancements and outlines future directions for sustainable biofuel production.