Nanoparticles hold tremendous potential as an effective drug delivery system. In this review we discussed recent developments in nanotechnology for drug delivery. To overcome the problems of gene and drug delivery, nanotechnology has gained interest in recent years. Nanosystems with different compositions and biological properties have been extensively investigated for drug and gene delivery applications. To achieve efficient drug delivery it is important to understand the interactions of nanomaterials with the biological environment, targeting cell-surface receptors, drug release, multiple drug administration, stability of therapeutic agents and molecular mechanisms of cell signalling involved in pathobiology of the disease under consideration. Several anti-cancer drugs including paclitaxel, doxorubicin, 5-fluorouracil and dexamethasone have been successfully formulated using nanomaterials. Quantom dots, chitosan, Polylactic/glycolic acid (PLGA) and PLGA-based nanoparticles have also been used for in vitro RNAi delivery. Brain cancer is one of the most difficult malignancies to detect and treat mainly because of the difficulty in getting imaging and therapeutic agents past the blood-brain barrier and into the brain. Anti-cancer drugs such as loperamide and doxorubicin bound to nanomaterials have been shown to cross the intact blood-brain barrier and released at therapeutic concentrations in the brain. The use of nanomaterials including peptide-based nanotubes to target the vascular endothelial growth factor (VEGF) receptor and cell adhesion molecules like integrins, cadherins and selectins, is a new approach to control disease progression.