Nanofluids, an advanced class of heat transfer fluids, have gained significant attention due to their superior thermophysical properties, making them highly effective for various engineering applications. This review explores the impact of nanoparticle integration on the thermal conductivity, viscosity, and overall heat transfer performance of base fluids, highlighting improvements in systems, such as heat exchangers, electronics cooling, PV/T systems, CSP technologies, and geothermal heat recovery. Key mechanisms such as nanolayer formation, Brownian motion, and nanoparticle aggregation are discussed, with a focus on hybrid nanofluids that show enhanced thermal conductivity. The increase in viscosity poses a trade-off, necessitating careful control of the nanoparticle properties to optimize heat transfer while reducing energy consumption. Empirical data show up to a 123% increase in the convective heat transfer coefficients, demonstrating the tangible benefits of nanofluids in energy efficiency and system miniaturization. The review also considers the environmental impacts of nanofluid use, such as potential toxicity and the challenges of sustainable production and disposal. Future research directions include developing hybrid nanofluids with specific properties, integrating nanofluids with phase change materials, and exploring new nanomaterials such as metal chalcogenides to enhance the efficiency and sustainability of thermal management systems.