Nanomaterials are materials with structures typically between 1 and 100 nm. At this scale, these materials exhibit unique physical, chemical, electrical, and optical properties. These unique properties are a result of increased surface-to-volume ratio and quantum effects. Due to their versatile properties these materials have application in various industries including electronics, medicine, energy, and environment. Nanomaterials also serve as a critical component in the development of sensor technologies and neural networks. This chapter explores the application of nanomaterials in sensor technology for improved sensitivity, response time, and energy efficiency. In sensor technology, graphene and carbon nanotubes being extremely sensitive and having rapid charge transfer are exploited as gas and biosensor, while quantum dots are used in fluorescence-based sensing. The role of nanomaterials in neural networks for faster data processing and performance enhancement of edge-based computing devices like neuromorphic computing, low power electronics, and bioinspired devices that mimic biological neural structures is also discussed. Further the chapter provides a comprehensive insight into recent advancements and key challenges along with future research directions to overcome these limitations, paving the way for next-generation, multifunctional and adaptive systems with enhanced sensing and learning.