Increased demand for packaged food products urgently requires innovation in sustainable packaging materials to replace prevailing plastic materials currently in use for food packaging. Sustainable materials should be capable of supporting or maintaining a process continuously over time besides preventing the depletion of natural resources to save the environment. Biopolymers or biological macromolecules can replace plastics due to their unique properties such as biodegradability, biocompatibility, sustainability, and renewable nature. However, the greater costs, hydrophilicity, lower mechanical, barrier, and thermal properties of biopolymers limit the range of applications. Limitations of biopolymers can be overcome by reinforcement with nanofillers, which could act as active ingredients also to produce potentially smart bio-nanocomposites. The characteristics of nanofillers offer a sizable interphase between the biopolymer matrix and nanofiller. The novel bio-nanocomposites perform multiple functions like carriers of bioactive compounds with antimicrobial, antioxidant, or nutritional properties and communicate real-time quality of the food. The most common nanofillers used to modify bio-nanocomposites are clay, metal oxides, metal, carbon nanostructures, natural biopolymers, and biodegradable polymers. Green nanoparticle synthetic methods are effective to reduce or minimize toxic effects, since hazardous chemicals used for synthesis of nanoparticles increase their toxicity. This chapter presents the recent research to develop novel biopolymer-based sustainable composites for food packaging applications.