Targeted delivery can elevate the local drug concentration within tumor tissues, while minimizing drug distribution to normal tissues, thus enhancing the effectiveness of anti-tumor medications and reducing adverse effects and systemic toxicities. Nanobodies, the novel molecular pattern of antibodies characterized by their small size, high stability, strong specificity, and low immunogenicity, have been extensively applied in targeted drug delivery for tumor therapy. This review discusses structural disparities and functional advantages of nanobodies compared to other antibody fragments and full-length antibody. It also highlights nanobody applications in targeted tumor therapy, focusing on their use in modifying delivery systems, e.g., liposomes, EVs, micelles, albumin nanoparticles, gold nanoparticles, polymeric nanoparticles, and as nanobody-drug conjugates. This review delves into the methods applied for integrating nanobodies into different drug delivery carriers, in order to provide useful information for researchers developing nanobody-based targeted drug delivery systems.