Nanocomposites have brought about revolutionary changes in the defense, aeronautical, and aerospace industries owing to their lightweight, strong, and multifunctional properties. These higher technology materials are composed of a continuous matrix phase (polymer, metal, or ceramic) filled with dispersed nanoscale particles (nanoparticles, nanofibers, nanoplatelets, or nanotubes). Nanoscale materials undergo interfacial interactions and exhibit an exponentially large surface-to-volume ratio, triggering the amplification of fundamental interactions and bonding processes like conventional composites. The most interesting materials produced are carbon-based nanomaterials such as carbon nanotubes and graphene derivatives, which have unique optical, electrical, structural, and chemical properties. Another way to achieve synergies is through the design of hybrid nanocomposites, where two or more types of nanoscale fillers of different natures are used. Nanocomposites can be used for electromagnetic shielding, stealth, sensors, actuators, energy storage, and energy harvesting. Nevertheless, synthesis scalability, the ability to homogenously disperse, interfacial bonding, quality validation, duration of stability, safety, and environmental aspects are all considered challenges. Future research will focus on bio-inspired hierarchical structures, the use of machine learning to identify the mechanism of reinforcement(s), and in situ monitoring with real-time process control. Overcoming these technical, operational, and regulatory issues is important, and it would only be achieved by an integrated industrial research effort to help achieve the full potential of nanocomposites in modifying defense, aeronautical, and aerospace engineering.