Nanomaterials have emerged as key platforms for environmental remediation owing to their tunable surface chemistry, high specific surface area, and multifunctional physicochemical properties. This review provides a critical comparison between conventional nanomaterials (CNMs) and phyto-mediated nanomaterials (PMNs), with particular emphasis on material design, surface chemistry, pollutant removal mechanisms, environmental performance, and sustainability. CNMs, including metal and metal oxide nanoparticles, carbon-based nanomaterials, and hybrid nanocomposites, offer excellent adsorption, photocatalytic, redox, and antimicrobial performance but remain constrained by concerns regarding toxicity, environmental persistence, and energy-intensive synthesis. PMNs provide a greener alternative by integrating plant-derived surface chemistry with nanomaterial functionality, potentially reducing reliance on hazardous synthesis reagents while modifying interfacial interactions relevant to environmental remediation. The review critically discusses the mechanistic roles of adsorption, surface complexation, photocatalytic degradation, electron-transfer processes, and reactive oxygen species (ROS) generation in pollutant removal. Recent advances in water purification, soil and groundwater remediation, carbon sequestration, and climate-related environmental applications are comprehensively summarized. Finally, current challenges associated with reproducibility, scalability, environmental safety, life-cycle assessment, and regulatory considerations are critically analyzed, together with future perspectives toward the rational design of sustainable nanomaterials for next-generation environmental remediation technologies.