Nanosponges are emerging nanocarrier systems widely explored for controlled and targeted drug delivery applications, particularly in topical formulations. These porous, three-dimensional nanosized structures possess unique properties such as high drug-loading capacity, improved solubility enhancement, controlled release behavior, and enhanced bioavailability of poorly water-soluble drugs. The present review highlights the structure, types, materials, preparation methods, mechanism of drug release, evaluation parameters, and diverse pharmaceutical applications of nanosponges. Various preparation techniques including emulsion solvent diffusion, solvent evaporation, and ultrasound-assisted methods are discussed along with the role of polymers, solvents, and crosslinkers in nanosponge formation. Important characterization parameters such as particle size, entrapment efficiency, percentage yield, scanning electron microscopy, and in vitro drug release studies are also summarized. Furthermore, the review emphasizes the applications of nanosponges in oral, topical, antiviral, anticancer, oxygen delivery, agricultural, and detoxification systems. Advantages such as targeted delivery, reduced side effects, biocompatibility, and sustained drug release make nanosponges promising carriers in modern therapeutics. Despite challenges related to large-scale production and formulation optimization, recent advancements indicate significant future potential for nanosponges in next-generation drug delivery systems and biomedical applications.