Cancer remains a major global health concern, and thus, there is a growing demand for efficient and selective therapies with low systemic toxicity. Natural bioactive compounds have emerged as promising alternatives, and terpenoids have shown notable anticancer properties. They exert antiproliferative, proapoptotic, anti-invasive, and antimetastatic effects through the regulation of multiple molecular targets and signaling pathways, including modulation of apoptosis, suppression of angiogenesis, and inhibition of tumor-promoting inflammation. However, their clinical translation is constrained by poor aqueous solubility, low bioavailability, rapid systemic clearance, and inadequate tumor accumulation. Recent advances in nanotechnology offer strategies to overcome these limitations. Nanocarrier-based systems improve the solubility, stability, and pharmacokinetics of terpenoids, while enabling tumor-targeted delivery and controlled release. Various strategies, such as enhanced permeability and retention effect, ligand-mediated active targeting, and stimuli-responsive release have been used to achieve selective tumor accumulation and improved therapeutic outcomes. The purpose of this review is to provide a comprehensive evaluation of nanoformulated terpenoids in cancer with a special emphasis on their therapeutic applications and mechanisms of action. Preclinical studies demonstrate that nanocarrier-loaded terpenoids significantly increase bioavailability, enhance apoptosis, and suppress tumor angiogenesis compared with free terpenoids. The incorporation of artificial intelligence and machine learning further holds promise for the rational design of nanomedicines, accelerating their path toward clinical translation. Collectively, these developments position nanoformulated terpenoids as a powerful platform in precision oncology with strong potential for future application in cancer therapy.