This chapter explores the role of nanotechnology in improving drug delivery systems through functionalized nanomaterials. These materials address limitations of traditional methods, such as poor solubility and low bioavailability. The chapter reviews various types of functionalized nanomaterials, including liposomes, polymeric nanoparticles, dendrimers, and inorganic nanoparticles, focusing on their synthesis, surface modifications, and mechanisms of action. It discusses both passive and active targeted drug delivery principles, as well as controlled release strategies utilizing stimuli-responsive systems. Additionally, the chapter examines the translational potential of these nanocarriers for treating complex diseases like cancer, cardiovascular disorders, and neurological conditions, while addressing safety, biocompatibility, and regulatory challenges. Recent case studies and emerging research trends are presented to highlight the future directions of functionalized nanomaterials in drug delivery, emphasizing their potential to transform therapeutic strategies and enhance patient outcomes.