The global water crisis requires effective wastewater treatment methods where conventional approaches often face challenges related to cost, recyclability, efficiency, and overall effectiveness. In this regard, the significantly small size, large surface area, and enhanced photocatalytic properties of recently developed nanoparticles have opened new avenues for wastewater treatment. This comprehensive review focuses on recent advancements in the synthesis methods for different types of nanoparticles and nanocomposites based on metals, carbon, polymers, waste materials, and zeolites which have highly sustainable and innovative results in wastewater treatment. The introduction of silver and gold nanoparticles has enhanced photocatalytic and biological activities. Similarly, zeolite and seaweed composites have exhibited efficient dye degradation capabilities. Eco-friendly carbon soot nanoparticles have shown promising biological activities, while nitrogen-doped carbon quantum dots have exhibited long-term stability for various applications. Additionally, waste material-based calcium oxide nanoparticles and carbon quantum dot-carbon nanotube nanocomposites have also shown enhanced dye degradation activities.