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The facile self-assembly and nanomanipulation of nucleic acids hold great promise in the design of innovative, programmable materials, with applications ranging from biosensing to cellular targeting and drug delivery. Little is known, however, of the effects of confinement on biochemical reactions within such systems, in which the level of packing and crowding is similar to that of intracellular environments. In this review article we outline novel, unexpected properties of nucleic acids that arise from nanoscale confinement, as mainly revealed by atomic force and electron microscopy, electrochemistry, fluorescence spectroscopy, and gel electrophoresis. We review selected scientific studies over the last decade that describe the novel behavior of nanoconfined nucleic acids with respect to hybridization, denaturation, conformation, stability, and enzyme accessibility. The nanoscale systems discussed include self-assembled, water-soluble, DNA or RNA nanostructures, ranging in width from a few to several tens of nm; gold nanoparticles coated with DNA monolayers; and self-assembled monolayers of DNA, from a few to several hundreds of bp in length. These studies reveal that the functionality of nucleic acid-based nanosystems is highly dependent upon the local density, molecular flexibility and network of weak interactions between adjacent molecules. These factors significantly affect steric hindrance, molecular crowding and hydration, which in turn control nucleic acid hybridization, denaturation, conformation, and enzyme accessibility. The findings discussed in this review article demonstrate that nucleic acids function in a qualitatively different manner within nanostructured systems, and suggest that these novel properties, if better understood, will enable the development of powerful molecular tools for nanomedicine.