In recent decades, lipid-based nanoparticles (LN) have received considerable attention as nanoscale delivery systems to improve oral bioavailability of poorly absorbed bioactive compounds for health promotion and disease prevention. However, scientific studies on the biological fate of orally administered LN are very limited and the molecular mechanisms by which they are absorbed through the intestinal lumen into the circulation remain unclear. This paper aims to provide an overview of the biological fate of orally administered LN by reviewing recent studies on both cell and animal models. In general, the biological fate of ingested LN in the gastrointestinal tract is primarily determined by their initial physicochemical characteristics (such as the particle size, surface properties, composition and structure), and their absorption mainly occurs within the small intestine. In particular, depending upon the composition, LN can be either digestible or indigestible, with two distinct biological fates for each type of LN. The detailed absorption mechanisms and uptake pathways at molecular, cellular and whole body levels for each type of LN are discussed in detail. Limitations of current research and our vision for future directions to study the biological fate of ingested LN are also provided in this critical review.