Modern agriculture faces numerous challenges, including the increasing global food demand driven by a projected population growth to 9.7 billion by 2050, climate change, and resource depletion. To meet these demands, it is estimated that global food production needs to increase by 70%. Efficient fertilization is crucial to addressing these challenges. Traditional fertilization practices, while beneficial for soil health, face obstacles such as labour intensity, limited productivity, and inefficient nutrient delivery. This review explores an innovative solution: smart nanoparticles for precision fertilization, which aim to enhance nutrient use efficiency in crops. By encapsulating nutrients within nanoparticles, we can design mechanisms for controlled nutrient release, such as pH, moisture, and temperature-responsive systems. These nanoparticles promise improved nutrient absorption by plants and extended nutrient availability, positively influencing soil fertility and structure. Environmentally, they show promise with reduced nutrient runoff and greenhouse gas emissions, while economically, they offer potential cost benefits and improved yields. The review also delves into vital aspects of safety, regulatory guidelines, and the promising future of nanoparticle-aided smart fertilization in the realm of precision agriculture.