Nanodimensional materials such as transition metal oxides, polyanionic based materials and metal fluorides can be used as cathode while metal nanoparticles, alloys and metal oxides are preferred as anode for next-generation lithiumion batteries (LIBs) in order to obtain high reversible capacity, rate capability, safety, and longer cycle life. These nanomaterials can offer relatively short ionic and electronic pathways which leads to better transportation of both lithium ions and electrons to the particles core. This article emphasize on the effect of nanodimension on the electrochemical performance of cathode and anode materials. Their synthesis processes, electrochemical properties and electrode reaction mechanisms are briefly discussed and summarized. Furthermore, the article highlights recent past scientific works and new progresses in the field of LIBs. It also highlights the direction to overcome the existing issues of current lithium storage technology. In future, we may overcome all the existing issues of LIBs and can deliver excellent cathode and anode combinations to fulfill maximum practical efficiency with low cost and ultimate safety for high end applications.