Nanotheranostics is one of the biggest scientific breakthroughs in nanomedicine. Most of the currently available diagnosis and therapies are invasive, time-consuming, and associated with severe toxic side effects. Nanotheranostics, on the other hand, has the potential to bridge this gap by harnessing the capabilities of nanotechnology and nanomaterials for combined therapeutics and diagnostics with markedly enhanced efficacy. However, nanomaterial applications in nanotheranostics are still in its infancy. This is due to the fact that each disease has a particular microenvironment with well-defined characteristics, which promotes deeper selection criteria of nanomaterials to meet the disease needs. In this review, we have outlined how nanomaterials are designed and tailored for nanotheranostics of cancer and other diseases such as neurodegenerative, autoimmune (particularly on rheumatoid arthritis), and cardiovascular diseases. The penetrability and retention of a nanomaterial in the biological system, the therapeutic strategy used, and the imaging mode selected are some of the aspects discussed for each disease. The specific properties of the nanomaterials in terms of feasibility, physicochemical challenges, progress in clinical trials, its toxicity, and their future application on translational medicine are addressed. Our review meticulously and critically examines the applications of nanotheranostics with various nanomaterials, including graphene, across several diseases, offering a broader perspective of this emerging field.