In recent years, advances in nanotechnology have significantly influenced electronics manufacturing, industrial processes, and medical research. Various industries have seen a surge in the use of nanomaterials. However, several researchers have raised the alarm about the toxicological nature of nanomaterials, which appear to be quite different from their crude forms. This altered nature can be attributed to their unique physicochemical profile. They can adversely affect human health and the environment. Nanomaterials that have been released into the environment tend to accumulate over time and can cause a significant impact on the ecosystem and organisms with adverse health effects. Increased use of nanoparticles has led to increased human exposure in their daily lives, making them more vulnerable to nanoparticle toxicity. Because of their small size, nanomaterials can readily cross biological membranes and enter cells, tissues, and organs. Therefore, the effect of nanomaterials on the human environment is of particular concern. The toxicological effects of nanomaterials and their mechanisms of action are being researched worldwide. Technological advances also support monitoring new nanomaterials marketed for industrial and household purposes. It is a challenging area because of the exceptional physicochemical properties of nanomaterials. This updated review focuses on the diverse toxicological perspective of nanomaterials. We have discussed the use of different types of nanoparticles and their physiochemical properties responsible for toxicity, routes of exposure, bio-distribution, and mechanism of toxicity. The review also includes various and methods of assessing the toxicity of nanomaterials. Finally, this review will provide a detailed insight into nano material-induced toxicological response, which can be beneficial in designing safe and effective nanoparticles.