For a sustainable future, the search for biodegradable materials to replace conventional petroleum-based polymers for food packaging has received much attention because of the need to reduce plastic pollution in the environment. Biopolymers are generally biodegradable, renewable, nontoxic, and easily available in nature and can be effective potential alternatives to synthetic plastics. However, the inherent limitations of biopolymers in terms of poor mechanical and barrier properties, as well as inadequate thermal stability, have hindered their widespread adoption in the food packaging industry. With the advent of nanoscience, new avenues for innovation in novel food packaging materials with enhanced functional attributes have been realized. Upon dispersion in a biopolymer matrix, inorganic or organic nanofillers, which possess certain physical and chemical properties at the nanoscale, make these composites useful as packaging materials; tailored mechanical, barrier, thermal, and optical properties have been reported to meet specific requirements for food preservation and packaging. This review discusses the effects of the reinforcement of different types of nanofillers on the mechanical, barrier, antimicrobial and antioxidant properties of biopolymeric matrices used for food packaging applications. The importance of standardized regulations for the safe use of nanomaterials in food packaging has also been discussed in detail.