Development of nanobiomaterials has become essential in the field of biomaterials engineering, specifically in bone replacement, tissue regeneration, drug delivery, and cardiovascular treatment. In general, ceramics, metals, polymers, and their advanced composites and hybrids have been used as the matrix owing to their excellent biocompatibility and mechanical durability. However, there have been continued efforts to improve the properties of such matrix materials to minimize toxicity while introducing various smart characteristics resulting in a new generation of novel biomaterials with unexpected properties. Nanotechnology has provided a template for developing a plethora of new biomaterials whose ultimate properties are derived from the synergistic effects arising from the nanomaterial and the matrix. Nanofibers, nanoparticles, nanotubes, and 2-D structural materials have received the highest priority in such advanced applications. This review focuses on a survey of the nanomaterials used in bio-materials/bio-composites, their historical evolution, how their structural characteristics enhance the properties of biomaterials, and evaluation of their potential in revolutionizing the field of biomaterials.