Environmental contamination from textile dyes is a worldwide issue, and treating wastewater has become an extremely difficult challenge in recent years. The primary sources of dyes in the environment are the textile, paper, and pulp industries, tannery and craft bleaching industries etc. The amount of oxygen in water gets disrupted by dyes and affects the ecological balance of aquatic ecosystems and making water unsuitable for drinking, irrigation, and recreation purposes, therefore, it must be removed from the environment. Various physical and chemical methods such as adsorption method, photolysis and electrochemical treatment have been used for dye removal from the wastewater which is not very effective and sustainable. The limitations of conventional wastewater treatment has been overcome by use of various nanoparticles such as TiO2, ZnO, and Fe3O4 which exhibit significant potential of dye degradation because of their nano-size, electrochemical stability, high surface reactivity, high electron mobility and large surface area. Therefore, the present review mainly emphasizes the significance, mechanism and application of nanoparticles as photocatalysts to make them more practical in wastewater treatment. This review also offers valuable insights for environmentally friendly techniques like nanoparticle utilization particularly for dye removal along with varying perspectives on the limitations and effectiveness of nanoparticles.