Clean water is vital for life; it is required not only for drinking but also for the preparation of food and proper hygiene. Unfortunately, more than fifty percent of the world population mainly in China and India face a severe scarcity of water. Around 1.8 billion people inevitably drink water from sources having fecal contamination resulting in the death of about a million children every year. Scientists are developing various economic technologies to decontaminate and purify water. Nanomaterials-based technology offers an economic and effective alternative for water purification and decontamination. As nanomaterials are available globally, have remarkable antimicrobial activity and the ability to effectively remove organic and inorganic pollutants from water. This review discusses the potential role of nanomaterials in the purification of drinking water. As nanomaterials exhibit remarkable antimicrobial and antiparasitic activities against waterborne pathogens and parasites of primary concern like Shigella dysenteriae, Vibrio cholera, and Entamoeba histolytica. Nanomaterials also demonstrate the ability to absorb toxic chemicals like mercury and dyes from polluted water. However, for successful commercialization of the technology, some inherent bottlenecks need to be addressed adequately. These include nanoparticles aggregation, their seepage into drinking water and adverse effects on human health and the environment. Nanocomposites are being developed to overcome these problems and to combine two or more desirable properties for water purification. Widespread and large-scale use of nanomaterials for water purification soon may become a reality. Products containing nanomaterials such as Karofi, Lifestraw, and Tupperware for water purification are already available in the market.