Different types of cancers affect the gastrointestinal tract (GIT), starting from the oral cavity and extending to the colon. In general, most of the current research focuses on the systemic delivery of the therapeutic agents, which leads to undesired side effects and a limited enhancement in the therapeutic outcomes. As a result, localized delivery within gastrointestinal (GI) cancers is favorable in overcoming these limitations. However, the localized delivery via oral administration faces many challenges related to the complex structure of GIT (varied pH levels and transit times) as well as the harsh environment within tumor cells (hypoxia, efflux pumps, and acidity). To overcome these obstacles, nano-drug delivery systems (NDDs) have been designed and proved their potential by exploiting these challenges in favor of offering a specific delivery to the desired target. The current review begins with an overview of different GI cancers and their impact globally. Then, it discusses the current treatment approaches and their corresponding limitations. Additionally, the different challenges associated with localized drug delivery for GI cancers are summarized. Finally, the review discusses in detail the recent therapeutic and diagnostic applications of NDDs that have been conducted in oral, esophageal, gastric, colon, and liver cancers, aiming to offer valuable insights into the current and future state of utilizing NDDs for the local treatment of GI cancers.