Eco-friendly nanotechnology-enabled biopolymers are one of the novel concepts of packaging materials to substitute traditional synthetic polymers and their composites. This article succinctly reviews the recent developments of introducing additional functionalities to biopolymers using metal and metal oxide nanoparticles. The functionality of metal nanoparticles such as silver, zinc oxide, titanium dioxide, copper oxide, gold, and magnesium oxide, as food packaging materials were discussed. The addition of nanoparticles in biopolymers improves mechanical properties, gas barrier properties, durability, temperature stability, moisture stability, antimicrobial activity, antioxidant property, and UV absorbance and can prevent the presence of ethylene and oxygen, hence extending the shelf life of foodstuffs. Other than this, the functional activity of these biopolymer composite films helps them to act like smart or intelligent packaging. The selection of metal nanoparticles, particle migration, toxicological effect, and potential future scope in the food packaging industry are also reviewed.