Driven by a growing global demand for safe drinking water, coupled with escalating threats of water scarcity and rising pollution, innovative solutions are paramount for long-term water resource management. The recent investigations on nanotechnology’s multidimensional role in water treatment focus on its applications in adsorption, membrane filtration, immobilization, catalysis, disinfection, sensing, and multifunctional device creation. The use of nano-assisted bioremediation technologies, demonstrating how bacteria, fungus, yeast, microalgae, and enzymes may eliminate inorganic and organic pollutants is researched. In addition, the incorporation of microbial-assisted nanotechnology is being studied for its potential uses in microbial fuel cells (MFCs), bio-nanocomposites, and biologically enhanced nanoparticle (NP) production, all of which contribute to sustainable water management techniques. Using these modern methods, also addresses the removal of various impurities such as heavy metals and dyes. This chapter explores the advancements, challenges, and economic feasibility of microbial-assisted nanotechnologies for water treatment, addressing environmental, safety, regulatory, and ethical considerations. It also outlines future trends and contributes to the knowledge base on sustainable water resource management.