Nanomaterials have revolutionized sensor development due to their unique properties, including high surface area, enhanced catalytic activities, and tuneable physical and chemical characteristics. Integrating nanomaterials into sensors enhances their analytical performance across various transduction mechanisms. Nanomaterial-based sensors pave the way for developing highly sensitive, selective, and rapid sensing platforms for various analytes. Thus, it has opened various applications, including but not limited to medical diagnostics, environmental monitoring, defense, and homeland security. This chapter presents the widely utilized transduction mechanisms in nanomaterial-based chemical sensors and biosensors. The common transduction mechanisms include optical, electrochemical, and mechanical. The discussion will focus on how nanomaterials enhance the performance of sensors through these mechanisms.