<p>The transition from rigid wearable electronics to intrinsically functional textiles is a fundamental materials design problem rather than a simple integration problem. In the following, the evolution of smart textiles, starting from the first conductive fibers and ending with the latest achievements in the field of multifunctional smart textiles enabled by low-dimensional nanomaterials, including graphene, MXenes, carbon nanotubes, and metal nanostructures, is critically reviewed. Instead of reviewing the materials, the discussion will be focused on the structure–property–processing relationships governing the electrical stability, mechanical compliance, interfacial adhesion, and long-term durability of smart textiles under cyclic stretching and laundering. The various methods of nanomaterial incorporation into smart textiles, including dip coating, printing, <i>in situ</i> growth, and electrospinning, will be analyzed in the context of their percolation behavior, interfacial effects, defect formation, and scaling limitations. Finally, the reported smart textiles’ performance in various applications, including physiological sensing, environmental monitoring, energy harvesting and storage, thermal regulation, and wireless communication, will be compared and contrasted to reveal the real achievements in the field of smart textiles. Bottlenecks and challenges, including the conductivity/stretchability dilemma, washability, power density, and biocompatibility, will be recognized as the major challenges in the field of smart textiles. Finally, the design principles of the energy-autonomous, mechanically robust, and bio-integrated smart textiles will be discussed, and a roadmap to the development of AI-enabled smart textiles as adaptive human–machine interfaces in the Internet of Things will be drawn.</p>