This article aimed at providing comprehensive information on the use of nanomaterial in asphalt binder and mixes based on an exhaustive review of the literature. The complete literature review can broadly be perceived into three different segments. The first segment of this review discusses (a) the need of nanomaterial, and (b) different types of nanomaterials with their respective characteristics. The second segment of this review work discusses about the various functional aspects which have been reported to have an important role on or before construction of asphaltic layer, i.e. (a) mixing of nanomaterials with asphalt binder, (b) nanomaterial dispersion into asphalt binder matrix, and (c) high-temperature storage stability of binary composite (asphalt binder and nanomaterial) and triple composite (asphalt binder, polymer additive and nanomaterial) under high-temperature condition. Among different types of mixing approach, use of a high shear mixer and ultra-sonication individually or in combination has been reported in the literature for an efficient way for dispersion of nanomaterial in an asphalt binder matrix. To evaluate mixing of nanomaterial in asphalt binder matrix, different microscopic approach such as X-Ray Diffraction (XRD), Scanning Electron Microscopy (SEM), and Atomic Force Microscopy (AFM) has been recommended in the literature. The third segment emphasises on the effect of nanomaterial addition on performance-based parameters for (a) aging resistivity potential, (b) moisture damage resistivity potential, (c) intermediate, (d) high, and (e) low-temperature performance. The review of the literature showed that the addition of nanomaterial to asphalt binder not only improves the aging resistivity potential of asphalt binder but also improves the moisture damage resistivity potential, high, and intermediate temperature performance of asphalt binder and mixes. However, the mixed response was observed from the review of literature for the corresponding effect of nanomaterial on low-temperature performance parameters.