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Environmental pollution remains a pressing global challenge, necessitating innovative, efficient, and sustainable remediation technologies. Conventional methods often fall short due to high energy requirements, secondary pollution risks, and limited efficiency, prompting increased interest in nanotechnology-based alternatives. This review critically evaluates the remediation potential, mechanisms of action, and ecotoxicological implications of engineered nanoparticles, focusing on metal-based variants like zero-valent iron, titanium dioxide, and zinc oxide, alongside carbon-based materials including graphene and carbon nanotubes. This review provides quantitative performance benchmarks derived from systematic analysis of 198 peer-reviewed studies. Analysis of 198 peer-reviewed studies (2015–2024) demonstrates how nanoparticles' properties including size, surface area, and functionalization govern performance, with carbon-based nanomaterials achieving 80–99% adsorption capacities for heavy metals and organic pollutants, metal oxides demonstrate 70–95% redox efficiencies for recalcitrant compounds. Mechanistic advances include gold nanoparticles’ superior catalytic degradation of chlorinated compounds and superparamagnetic iron oxide nanoparticles’ (SPIONs) magnetic separation capabilities, both outperforming conventional approaches. Challenges persist in aggregation, pH sensitivity, and environmental stability, though surface modifications (silica-coated nZVI) and green synthesis approaches (algal-derived NPs with 30–40% lower energy consumption) show promise in addressing these limitations. Critical knowledge gaps remain in long-term environmental fate, particularly regarding bioaccumulation and trophic transfer in aquatic systems, with current ecotoxicological data heavily skewed toward laboratory conditions rather than field-scale assessments. This comparative synthesis integrates structure-property-toxicity relationships across metal- and carbon-based nanoparticles, establishing quantitative correlations between BET surface area and remediation efficiency, evaluating regulatory frameworks across OECD, EPA, and REACH guidelines, and identifying priority research directions including development of water-stable metal-organic frameworks for aqueous remediation, cost-optimized bimetallic systems achieving > 90% degradation efficiency with minimal metal leaching, regeneration strategies maintaining performance over multiple treatment cycles, and standardized protocols for assessing nanoparticle transformation in natural environmental matrices. The review emphasizes that transitioning these technologies from laboratory innovation to responsible field deployment requires integrated lifecycle assessments, harmonized international regulations, and interdisciplinary collaboration bridging nanotechnology, environmental toxicology, and implementation policy.