Bio-based, biodegradable, and renewable polymers offer a promising alternative to traditional synthetic polymers derived from petroleum or other non-renewable resources. However, their use is limited by suboptimal properties and high costs. Incorporating sustainable reinforcements into the polymer matrix significantly improves biopolymer performance while preserving key properties, sustainability, and cost-effectiveness. Bio-based polymeric composites have emerged as a crucial category of biopolymers, playing a key role in advancing a sustainable, circular economy. This review provides an updated overview of bio-based polymer composites and nanocomposites, focusing on reinforcement strategies using natural nanofillers and engineered nanoparticles. We summarize key synthesis and processing methods, discuss structure–property relationships, and highlight recent advances in applications such as food packaging, biomedical devices, energy systems, environmental remediation, 3D printing, and supercapacitors. Polymer nanocomposites are versatile, with their performance depending on the type, size, and interactions between the fillers and the polymer matrix. Progress in metallic, ceramic, carbon-based, natural, and hybrid fillers has improved their properties. Using bio-based polymers and renewable fillers supports sustainability. Natural nanofillers derived from renewable sources and industrial byproducts offer a sustainable approach to developing high-performance, biodegradable nanocomposites. Smart nanocomposites can react to external stimuli by integrating specialized fillers that enhance their mechanical and mobility properties. Shape memory nanocomposites can be remotely activated—using heat, electricity, magnets, or light—enabling advanced applications. Finally, we address major challenges and outline future directions for scalable, circular-material solutions, drawing on perspectives from the circular economy and life cycle assessment (LCA).