Increasing demand of sustainable energy along with environmental issues associated with fossil fuels has exaggerated research into second-generation bioethanol or lignocellulosic biomass materials. The lignocellulosic biomass is composed of cellulose, hemicellulose, and lignin. However, some challenges are associated due to its structural complexity and resistance to enzymatic degradation. Enzymatic hydrolysis process, where biomass is breaking down into fermentable sugar, is often hindered by enzyme instability, lignin-derived inhibitors, and high production costs. Recent advancements have highlighted that nanomaterials as transformative tools in this enzymatic hydrolysis process. Nanoparticles, including magnetic nanoparticles, carbon-based structures, and metal oxides, generally show high surface area that enhance enzyme–substrate interaction along with enzyme immobilization. Immobilized enzymes exhibit improved stability, reusability, and resistance to harsh environmental conditions in order to reduce operational costs. This book chapter presents a comprehensive overview of nanomaterials in enzymatic hydrolysis, synthesis, functionality, and role of nanomaterials in enhancing bioethanol production from lignocellulosic material. Future research should focus on integrating nanoparticles-assisted enzymatic system into large-scale biorefineries for bioethanol production for making this technology more efficient, affordable, and ecofriendly.