The advancement in nanotechnology has enabled a significant expansion in agricultural production. Agri-nanotechnology is an emerging discipline where nanotechnological methods provide diverse nanomaterials (NMs) such as nanopesticides, nanoherbicides, nanofertilizers and different nanoforms of agrochemicals for agricultural management. Applications of nanofabricated products can potentially improve the shelf life, stability, bioavailability, safety and environmental sustainability of active ingredients for sustained release. Nanoscale modification of bulk or surface properties bears tremendous potential for effective enhancement of agricultural productivity. As NMs improve the tolerance mechanisms of the plants under stressful conditions, they are considered as effective and promising tools to overcome the constraints in sustainable agricultural production. For their exceptional qualities and usages, nano-enabled products are developed and enforced, along with agriculture, in diverse sectors. The rampant usage of NMs increases their release into the environment. Once incorporated into the environment, NMs may threaten the stability and function of biological systems. Nanotechnology is a newly emerging technology, so the evaluation of the associated environmental risk is pivotal. This review emphasizes the current approach to NMs synthesis, their application in agriculture, interaction with plant-soil microbes and environmental challenges to address future applications in maintaining a sustainable environment.