Recent advancements in nanotechnology have revolutionized food packaging by introducing environmentally friendly nanomaterials (NPs) synthesized through green methods. These nanomaterials offer unique properties, enhancing food protection, preservation, and safety, while smart packaging provides functionalities such as sensing, monitoring, and communicating information about the product. This innovation ensures extended shelf life, reduces food waste, and guarantees food quality standards. Integrating nanotechnology into food packaging production offers innovative solutions compared to traditional methods, particularly in enhancing barrier properties and antimicrobial activity crucial for minimizing spoilage. The green synthesis process promotes sustainability by reducing environmental impact and waste generation, in accordance with the Sustainable Development Goals set by the United Nations. However, the adoption of nanomaterials in food packaging faces challenges such as regulatory issues and concerns over potential health risks from nanoparticle migration into food. Addressing these challenges requires further research and industry collaboration to ensure the safe and effective nanomaterials’ use. Despite these challenges, nanotechnology promises to optimize food packaging efficiency with its robust mechanical strength, heat resistance, and superior barrier characteristics. This chapter explores the current landscape of nanomaterial applications in food packaging, emphasizing both the benefits and challenges associated with their use in creating next-generation sustainable packaging solutions.