Nanocomposite (NC) hydrogel (HG) sensors have emerged as a transformative innovation in wearable healthcare monitoring systems. By incorporating carbon-based, metal-based, and polymer-based NCs, these sensors offer exceptional properties such as biocompatibility, flexibility, high water content, and stretchability—making them highly suitable for continuous, real-time physiological monitoring. Advanced fabrication techniques, including in situ polymerization, conformal coating, and dynamic crosslinking, significantly enhance their functional performance and scalability for practical deployment. The mechanical robustness and electrical responsiveness of these NC HGs, coupled with self-healing capabilities, strong adhesion to skin, and resistance to environmental stressors, ensure their reliability and durability in diverse healthcare applications. These HG sensors have shown great promise in monitoring vital signs, managing chronic conditions, supporting rehabilitation, enabling real-time glucose monitoring, and facilitating wound healing. Despite their considerable potential, several challenges remain—particularly in technical optimization, user comfort and integration, and regulatory approval—that must be addressed to enable their widespread adoption. This review highlights recent innovations, material properties, and healthcare applications of NC HG sensors and discusses the critical challenges that must be overcome to fully realize their impact as wearable textile materials in modern healthcare systems.