The global freshwater crisis, exacerbated by escalating pollution, poses a significant threat to human health. Addressing this challenge required innovative strategies to develop highly efficient and process-adaptable materials for water decontamination. In this regard, nanomaterials with confinement structures have emerged as a promising solution, outperforming traditional nanomaterials in terms of efficiency, selectivity, stability, and process adaptability, thereby serving as an ideal platform for designing novel functional materials for sustainable water treatment. This Review focuses on recent advancements and employment of nanoconfinement effects in various water treatment processes, emphasizing the fundamental chemistry underlying nanoconfinement effects. Also, the existing knowledge gaps related to nanoconfinement effects and future prospects for expanding their applications in diverse water treatment scenarios are discussed.