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Biofuel is one of the best alternatives to petroleum-derived fuels globally especially in the current scenario, where fossil fuels are continuously depleting. Fossil-based fuels cause severe threats to the environment and human health by releasing greenhouse gases on their burning. With the several limitations in currently available technologies and associated higher expenses, producing biofuels on an industrial scale is a time-consuming operation. Moreover, processes adopted for the conversion of various feedstock to the desired product are different depending upon the various techniques and materials utilized. Nanoparticles (NPs) are one of the best solutions to the current challenges on utilization of biomass in terms of their selectivity, energy efficiency, and time management, with reduced cost involvement. Many of these methods have recently been adopted, and several NPs such as metal, magnetic, and metal oxide are now being used in enhancement of biofuel production. The unique properties of NPs, such as their design, stability, greater surface area to volume ratio, catalytic activity, and reusability, make them effective biofuel additives. In addition, nanomaterials such as carbon nanotubes, carbon nanofibers, and nanosheets have been found to be cost effective as well as stable catalysts for enzyme immobilization, thus improving biofuel synthesis. The current study gives a comprehensive overview of the use of various nanomaterials in biofuel production, as well as the major challenges and future opportunities. [ABSTRACT FROM AUTHOR]