Water scarcity is being recognized as a present and future threat to human activity and as a consequence water purification technologies are gaining major attention worldwide. Nanotechnology has many successful applications in different fields but recently its application for water and wastewater treatment has emerged as a fast-developing, promising area. This review highlights the recent advances on the development of nanoscale materials and processes for treatment of surface water, groundwater and industrial wastewater that are contaminated by toxic metals, organic and inorganic compounds, bacteria and viruses. In addition, the toxic potential of engineered nanomaterials for human health and the environment will also be discussed.