The need for a green and sustainable nanomaterial sourced from biomass in the form of nanochitin has raised interest in paving the way towards incorporating biological resources for the production of functional materials. Nanochitin as nanofibers and nanocrystals/whiskers have attractive features like their ability to self-assemble into multidimensional biomaterials while retaining their intrinsic characteristics. Herein, the review discusses chitin’s molecular association and hierarchical assemblies and gives an overview of the extraction methods adopted to produce nanochitin. Recent progress in the development of advanced functional nanochitin-based materials/composites and their current application in agriculture and environmental remediation are reviewed to gain a better understanding of their applicability for forthcoming research and improvement. Furthermore, the environmental impact assessment of chitin has been discussed, followed by the techno-economic analysis, thus providing scope for improvement in manufacturing and perspectives on the potential of nanochitin in the context of sustainable material and their role in circular bioeconomy. © 2025 Elsevier B.V.