Nanobodies for the first time were identified in the sera of Camelidae. Single-domain antibodies or nanobodies are a class of next-generation antibodies that have specific features: small size (in nanoscale), high penetration in various tissues, high stability in hard situations and ease production process in microbial systems. In fact single-domain antibodies are the smallest fragment of the antibody with binding ability. Unique characteristics and features of nanobodies make them an appropriate candidate for further evaluation as the development of novel antibody-based therapeutics. In this regard single-domain antibodies are in the interest of many researchers as well as biopharmaceutical companies for diagnostic and therapeutic applications. Nowadays several single domain antibodies have been developed and evaluated in different clinical trials. Because of many advantages of single-domain antibodies over other formats of antibodies, they could be good replacement for other formats of antibodies in near future. Here, we review the biology, engineering platforms and application of nanobodies.