Shape memory polymers (SMPs), which initiate shape transformation in response to environmental stimuli, have attracted significant attention in both academic research and technological innovation. The combination of functional nanomaterials and SMPs has led to the emergence of a variety of shape memory polymeric nanocomposites (SMPNs) with multifunctional properties. This has injected new vitality and vigor into fields such as tissue engineering, biomedicine, optical sensing, aerospace and mechanical engineering. In this review article, we present a brief introduction to the fundamentals of SMPs and SMPNs, followed by a discussion of the recent advances in their multifunctional applications in biomedical manufacturing, drug delivery devices, mechanical sensing, micro-engines, etc. The opportunities and challenges in the future development of SMPs are also discussed.