Nanotechnology has emerged as a transformative field with profound implications for nutrition and mental health. By manipulating matter at the nanoscale (1–100 nm), nanotechnology enables unique physical, chemical, and biological properties that can revolutionize food science and medical applications. In nutrition, nanotechnology facilitates improved nutrient delivery through techniques such as nanoencapsulation and nanoemulsions, enhancing the stability, bioavailability, and controlled release of essential vitamins, minerals, and bioactive compounds. These innovations promise better health outcomes for specific populations, including the elderly and individuals with nutrient deficiencies. Furthermore, the integration of nanotechnology in food processing and packaging ensures extended shelf life, improved safety, and the development of functional foods with enhanced sensory attributes. The intersection of nanotechnology and mental health offers novel opportunities for addressing psychiatric disorders like depression and anxiety. Nutritional psychiatry underscores the critical role of diet and gut microbiota in brain function and mental well-being. Nanotechnology’s ability to enhance the delivery of psychobiotics, micronutrients, and neuroactive compounds can optimize gut-brain communication pathways, influencing neurotransmitter synthesis, immune modulation, and neurogenesis. However, challenges persist, including the toxicity and bioaccumulation of nanoparticles, regulatory gaps, and their potential environmental impact. This review highlights the current advancements, such as improved nutrient absorption and personalized neuro-nutrition, alongside the obstacles that need addressing to realize nanotechnology’s full potential. Future research should focus on molecular mechanisms, long-term safety evaluations, and multidisciplinary approaches combining nanotechnology, neuroscience, and psychiatry. While nanotechnology’s integration into nutrition and mental health holds immense promise, ethical, environmental, and social considerations must be meticulously evaluated to ensure sustainable and beneficial applications. This comprehensive exploration provides a roadmap for leveraging nanotechnology to advance both physical and mental health outcomes.