Tissue regeneration could offer therapeutic advantages for individuals experiencing organ or tissue damage. Recently, advances in nanotechnology have provided various nanomaterials, with a wide range of applications, for modulating stem cell behavior and for further therapeutic applications in tissue regeneration. Defects in cell proliferation and differentiation, a low mechanical strength of scaffolds, and inefficient production of factors that are essential for stem cell differentiation are the current challenges in tissue regeneration. This review provides a brief explanation about the link between nanotechnology and tissue engineering, highlighting the current literature about the interaction between nanoparticles (NPs) and stem cells, the promotional effect of NPs on stem cell differentiation into various lineages, and their possible therapeutic applications. We also tried to describe the mechanism through which NPs regulate the spatial-temporal release and kinetics of vital growth and differentiation factors, enhance stem cell differentiation, and improve culture conditions for in vivo tissue regeneration. The field of nanotechnology is promising and provides novel nanomaterials and methods with valuable clinical applications in the regenerative medicine. Understanding the mechanism, as well as the toxic effects of NPs in stem cell biology will undoubtedly provide valuable insight into their clinical application in the regenerative medicine.