Nanoparticle based drug products are of growing interest in the field of pharmaceutics. Enhancing saturation solubility and dissolution velocity by preparing drug nanoparticles correlates with faster absorption rates. The faster absorption rates can correlate into better bioavailability, reduction in fed and fast effects and inter-subject variability with improved therapeutic response. Drug nanoparticles have shown potential applications in developing several oral and parenteral dosage forms with improved therapeutics. Suitable formulations for the commonly used routes of administration can be identified employing nanoparticle technology. Drug nanoparticles provide the discovery scientist an alternate avenue for screening and identifying a superior drug delivery system. For toxicologist, the approach provides a means for dose escalation with minimum amount of drug substance. In the recent years, formulating poorly water-soluble compounds using a nanoparticulate approach has evolved from a conception to a realization whose versatility and applicability are being vastly recognized. In the present review, industrially relevant production technologies are critically reviewed. The nanoparticle characterization techniques and potential challenges involved in the development of drug nanoparticles were discussed in detail.