Nanotechnology has emerged as a promising field with significant applications in agriculture, offering potential benefits such as enhanced crop protection, improved nutrient delivery, and soil remediation. Due to their unique physicochemical properties, nanoparticles (NPs) have the potential to improve agricultural productivity and sustainability. However, their introduction into agroecosystems raises concerns regarding their interactions with plants, soil, microbial populations, and environmental sustainability. Understanding these interactions is crucial for evaluating both the advantages and risks associated with the use of NPs in agriculture. Nanoparticles influence plant physiology through root uptake and foliar absorption, impacting germination, growth, photosynthesis, and nutrient assimilation. While some NPs, such as silver (Ag) and titanium dioxide (TiO2), may enhance plant growth at lower concentrations, excessive exposure can induce phytotoxicity, oxidative stress, and membrane damage. Additionally, the potential bioaccumulation of NPs in edible plant tissues raises food safety concerns. In soil ecosystems, NPs interact with soil particles and microbial communities, affecting soil fertility, water retention, and nutrient cycling. While some NPs enhance soil properties and plant–microbe interactions, others, such as copper (Cu) and AgNPs, exhibit antimicrobial effects that may disrupt beneficial microbial populations. Furthermore, NPs’ mobility and persistence in soil raise concerns regarding groundwater contamination and bioaccumulation in higher trophic levels. Addressing these challenges requires multidisciplinary research to assess the long-term ecological risks and develop regulatory frameworks for the safe use of nanotechnology in agriculture. A balanced approach that maximises the benefits of NPs while mitigating potential environmental and health risks is essential for ensuring sustainable agricultural practices.