When handling nanomaterials, its surface comes in contact with the human body in someway first. Hence the surface state of nanoparticles is one of the most important parameters for determining distribution and transport in to the body and so a method of identifying and exchanging chemical moieties on the surface of nanoparticles is highly desirable. For this purpose the surface of nanoparticles is functionalized with a variety of polymers, biomolecules, and other capping agents. Examples of common surface materials include silica, polyethyleneglycol (PEG), PVP, citrate, phosphate, tannic acid, and biomolecules such as antibodies and DNA. Nanoparticles can also be coated with materials such as silica or alumina. Magnetic functionality can be introduced into core or shell layers. Fluorescence molecules, particles, or layers, can be incorporated to allow for tracking and imaging. Molecules can be bound to the surface of the particles to impart improved functionality such as polyethyleneglycol for biological compatibility in vivo or antibodies for targeting. Functionalization of nanotubes by surfactant and polymer species significantly reduces nonspecific protein adsorption, while co-immobilization of ligands or antibodies can impart specificity in protein binding on nanotube surfaces.It has been known for a while that surface functionalization could modify the toxicity of nanomaterials. However, the mechanisms behind these observations are not well understood.Methods have now been established to obtain monodisperse nanocrystals of various metallic and semiconducting materials, fullerenes of distinct properties, single- and multi-wall carbon nanotubes. Novel organic nanomaterials such as supramolecular nanostructures, polymeric dendrimers with tailored functionalities, as well as other nanophase constructs, are being actively developed. One key step towards novel applications of nanostructured materials concerns their surface functionalization, assembly, patterning, orientation and alignment into functional networks without mutual aggregation. Among the bottom-up strategies, self-assembly provides a promising route to build up complex systems with immense flexibility in terms of nanoscale building blocks and resulting functionalities and properties.