Nanotechnology has been employed to provide solutions to the problems arising in the design, construction, and utilization of functional structures with at least one dimension measured in nanometres. The outstanding features of nanomaterials include high functional density, high sensitivity, special surface effects, large surface area, high strain resistance and catalytic activity. This article is aimed to provide a comprehensive understanding of the application of nanomaterials in the field of pavement engineering (in asphalt binders and mixtures) based on an exhaustive review of the literature. The current review work can be broadly classified into three segments. The first segment deals with the (a) basic definition of asphalt binder (b) definition of nanomaterials (c) different types of nanomaterials used in the field of pavement engineering (with their characteristics). The second segment deals with functional characteristics of the asphalt modified with nanomaterials that are (a) mixing of nanomaterials with asphalt binders (b) characterization of nanomaterial modified binders (c) the difficulties encountered in achieving nanomaterial modified binders. The third segment deals with the effect of nanomaterials (a) on the properties of asphalt binder (b) on the properties of asphaltic mixtures (c) comparison of nanomaterials with other asphalt modifiers. The role of certain nanomaterials (which include carbon nanotubes, nanoclays, nanosilica, nano titanium dioxide, nano zinc oxide, nano aluminium oxide, nano iron oxide, nanophosphor, nano hydrated lime and graphene) in the field of pavement engineering has been highlighted in the present review work. Usually, nanomaterials have a positive influence on binder properties which include viscosity, rutting resistance, fatigue resistance, temperature susceptibility and ageing resistance. Unlike polymer modified binders, nanomaterial modified binders, exhibit storage stability at higher temperatures. Not only this, nanomaterials are effective in enhancing the high-temperature storage stability of Polymer Modified Binder. Nanomaterials are also responsible for improving the properties of asphaltic mixtures which include rutting resistance, fatigue resistance, Marshall Stability, indirect tensile strength, resilient modulus and moisture stability. After thorough research on nanomaterials modified binders, it can be established that among the various nanomaterials, extensive studies have been carried out on carbon nanotubes, nanoclays and nanosilica. They can be categorized as the most effective nanomaterial modifiers. Still, there is immense scope for exploring the properties of other nanomaterials, especially Graphene. [ABSTRACT FROM AUTHOR]