Advanced multifunctional nanomaterials are emerging as versatile platforms for addressing interconnected energy and environmental challenges through tunable composition, high surface area, engineered interfaces, and nanoscale reactivity. This review critically examines the design, synthesis, functionalization, and application of metal, metal oxide, carbon-based, polymeric, porous, two-dimensional, and hybrid nanomaterials. Particular emphasis is placed on green synthesis, renewable precursors, low-impact fabrication, waste-derived feedstocks, scalability, and life-cycle sustainability. The role of surface functionalization, heteroatom doping, defect engineering, heterostructure formation, and interfacial charge transfer in controlling catalytic, optical, electrochemical, and adsorption properties is systematically discussed. Applications in heterogeneous catalysis, photocatalytic hydrogen production, carbon dioxide conversion, pollutant degradation, rechargeable batteries, supercapacitors, and emerging flexible storage devices are evaluated using structure–property–performance relationships. The review also explores nanomaterial-enabled water purification, membrane separation, antimicrobial treatment, and chemical, electrochemical, optical, and gas sensing, including integrated remediation–sensing platforms for real-time monitoring. Current barriers involving toxicity, agglomeration, instability, poor selectivity, recovery, reproducibility, standardization, and industrial scale-up are identified. Finally, future directions highlight artificial-intelligence-guided discovery, operando characterization, circular material design, self-healing systems, and safe, economical deployment, establishing a unified roadmap for sustainable multifunctional nanotechnology across energy conversion, storage, environmental remediation, and chemical detection under realistic operating conditions and across diverse environmental matrices worldwide.