<p>Diatoms, unicellular microalgae with complex siliceous shells, have gained attention due to their many potential uses. They have emerged as a key focus in metabolic engineering, thanks to their distinct silica-based cell walls, which provide advantages over synthetic nanomaterials. Their naturally generated nanoscale architectures combine sustainability, biocompatibility, and intricate porosity, making them ideal for a wide range of applications, such as environmental monitoring, biosensing, and targeted drug administration. At the same time, they play an important role in preserving ecosystem health and biodiversity. Some of them can be serving as sensitive indicators of environmental changes due to their widespread distribution and responsiveness to pollutants. This review focuses on recent advances in diatoms-based nanotechnology for the synthesis of various nanomaterials. In contrast to earlier research, we present a comparative analysis of diatom biosilica (DB) and synthetic substitutes, highlighting their usefulness and new developments. In addition, we investigate the obstacles and future prospects in using diatoms for real-world applications for innovation in a variety of industries, including biotech, pharmaceuticals, healthcare, and environmental monitoring. Moreover, we investigate several aspects of diatom biochemistry, including their diversity and biosynthesis, ecological value, and potential for biotechnological and therapeutic uses. In summary, this paper underlines diatoms’ revolutionary potential in shaping the future of sustainable nanotechnology by bridging basic and applied sciences.</p>