Nanocomposites have three types polymer, ceramic, and metal matrix nanocomposites. Nowadays polymer nanocomposites have received tremendous attention in academics and industries with several applications due to their improved properties like high strength-to-weight ratio, thermal stability, electrical conductivity, chemical stability, easily customizable product properties, flexible manufacturing processes, high resistance to corrosion or erosion and lower cost. Such nanocomposites have a wide range of drug delivery and tissue engineering applications. They can be used to create scaffolds that support the growth and regeneration of tissues, gene therapy, food and beverage preservation, biosensing, and bioimaging, providing enhanced sensitivity and specificity for detecting biological molecules and imaging tissues. Nanocomposites are alternatives to micro-composites and monolithic materials due to their outstanding properties. These nanocomposites were fabricated using carbon nanotubes in 1991 and composite materials with a nanometer range. Recently, nanocomposites have exhibited great potential for early detection and accurate imaging in cancer diagnosis. This chapter discusses the various fabrication techniques and additives required for the fabrication of polymer nanocomposites, their manufacturing method of preparation and characterization in detail. Recent challenges for polymer nanocomposites include biocompatibility, toxicity, controlled release, scalability, and stability in biological environments. Polymer nanocomposites are expected to play a crucial role in developing advanced drug delivery systems that can target specific cells or tissues, improving the efficacy and reducing side effects of treatments.