Lateral flow assays (LFAs) are currently the most used point-of-care sensors for both diagnostic (e.g., pregnancy test, COVID-19 monitoring) and environmental (e.g., pesticides and bacterial monitoring) applications. Although the core of LFA technology was developed several decades ago, in recent years the integration of novel nanomaterials as signal transducers or receptor immobilization platforms has brought improved analytical capabilities. In this Review, we present how nanomaterial-based LFAs can address the inherent challenges of point-of-care (PoC) diagnostics such as sensitivity enhancement, lowering of detection limits, multiplexing, and quantification of analytes in complex samples. Specifically, we highlight the strategies that can synergistically solve the limitations of current LFAs and that have proven commercial feasibility. Finally, we discuss the barriers toward commercialization and the next generation of LFAs.