Despite the numerous challenges associated with the application of nanotechnology in neuroscience, it promises to have a significant impact on our understanding of how the nervous system works, how it fails in disease, and the development of earlier and less-invasive diagnostic procedures so we can intervene in the pre-clinical stage of neurological disease before extensive neurological damage has taken place. Ultimately, both the challenges and opportunities that nanotechnology presents stem from the fact that this technology provides a way to interact with neural cells at the molecular level. In this review we provide a neurobiological overview of key neurological disorders, describe the different types of nanomaterials in use and discuss their current and potential uses in neuroscience. We also discuss the issue of toxicity in these nanomaterials. This review presents many of the different applications that advances in nanotechnology are having in the field of neurological sciences, especially the high impact they are having in the development of new treatment modalities for neurological disorders that will induce the expected physiological response while minimizing undesirable secondary effects. In conclusion, we weigh in on what the promises and challenges are for future development in this groundbreaking field.