Accessibility to sufficient clean and fresh water for human consumption is one of the most important issues worldwide, and thus extensive research has been conducted to address this issue. Nowadays, nanotechnology has become a fast-growing technology due to the features of engineered nanomaterials (NMs). Recent advances in nanotechnology provide leapfrogging approaches for contaminant removal by overcoming the shortcomings of existing treatment technologies and offering cost-effective treatment methods with high capacity. The goal of this review is to provide an in-depth overview of some of the recent advances in the development of functional NMs used for the environmental remediation of a variety of pollutants. In this critical review, a new and different categorization of NMs including carbonaceous nanostructures, nanoparticles and nanocomposites is provided. The properties, removal mechanism of pollutants by different NMs, advantages and disadvantages of each group of NMs and their recent development in water, wastewater and groundwater treatment are reviewed and scrutinized. Results revealed that among the different NMs, graphene and its derivatives (e.g. graphene oxide, reduced graphene oxide, graphene-based metals and metal oxide) with excellent environmental compatibility and selectivity, large surface area and high purity, exhibit great absorption capacity because they trap electrons, preventing their recombination. Due to the abundance, unique electronic structure, high porosity, stability, efficient light absorption and suitable charge transfer properties of metal oxides, they are mainly used as catalysts in photocatalytic reactions. The discovery of oxy-acids is another important finding in recent years. In some cases, oxy-acids exhibit higher photoactivity and surface areas and cost less than metal oxides. Thus, to benefit from the advantages of different NMs, binary or ternary composites of metal, metal oxides, oxy-acids and others have been developed. This strategy has led to an increase in surface area and a decrease in band gap, which can enhance environmental contaminant cleanup. Moreover, numerous recent studies have extensively highlighted their results and key findings. Finally, this review will present new horizons for the purposeful application of NMs in remediation by considering the associated challenges, including risk, toxicity and their fate in the environment.