Nanotechnology and miniaturization have been a huge boon to the field of novel drug delivery and have revolutionized the possibilities in the modern-day healthcare sector. The design of nano-scale drug carriers using various nanotechnology-based approaches for the delivery of lipophilic drug molecules is the current trend in novel drug delivery-based research. Hence the study on nanotech-based approaches along with their advantages and applications for solubility and bioavailability enhancement of poorly soluble potent drug molecules is indeed promising. Nanosponges (NSs) are nanotechnology-based drug carriers which are encapsulating type of vehicles that host both lipophilic and hydrophilic drugs/substances. They are prepared using a biodegradable polymer and a cross linker in a specified ratio and compose a cavity which can house lipophilic or hydrophilic drug molecules. An elaborate literature review and patent search stresses on the promising applications and advantages of nanosponges in modern day novel drug delivery. Substances like lipophilic drug molecules, nutraceuticals, gases, proteins and peptides, volatile oils, genetic material, etc. can be loaded on these nano-carriers., which are stable, compact, convenient to synthesize and easy to scale-up in laboratory. This review stresses on the advantages and applications of cyclodextrin based NS in novel drug delivery and throws light on some information on the patented work in this area. Various nanosponge formulations such as parenteral, topical, oral or inhalation are showing promising results in the healthcare domain and have tremendous potential for future growth and research. Therefore, due to their propitious advantages and applications in modern day novel drug delivery, NSs having tremendous potential to create a breakthrough in the healthcare domain. The authors of the review hope that this elaborate and updated review on advantages and applications of NSs in novel drug delivery discussed here could significantly help the researchers and scientists gain useful information and substantial insight about NS in novel drug delivery applications.