Nanofertilizers are a recent innovation in agricultural technology that have shown potential to enhance crop productivity. These nano-formulations of plant essential nutrients act as better alternatives of traditional fertilizers, by providing benefits like controlled and site-specific release, uniform absorption, higher solubility, increased nutritional availability, efficiency, and decreased environmental toxicity. However, there is a growing concern about their potential toxicity due to overuse. Studies indicate that the increased use of nanofertilizers leads to the accumulation of nanoparticles in the soil and water, which may adversely affect the environment and human health, by generating oxidative stress signals to cell surface and organelles. The toxicity of nanofertilizers is attributed to their small size and high surface area, leading to increased reactivity. Furthermore, the long-term effects of exposure to nanofertilizers on soil microbial communities and ecosystem dynamics in terms of decomposition and mineralization are not yet fully understood. There is an immediate need for a deep understanding of the mechanisms of nanoparticle toxicity, their fate, and optimum utilizable quantity to define dose-specificity, which will assist in sealing the existing gaps and determining their persistent application prospects.