Approximately 40% of new chemical entities are hydrophobic in nature and delivery of poorly water-soluble drugs takes the subject of much research. Formulation scientists confront a major challenge to formulate of highly lipophilic drugs because of the poor oral bioavailability. Nanoemulsion drug delivery system is one of the promising technologies, which is being applied to enhance the solubility and bioavailability of lipophilic drugs as well as deliver drugs at controlled rate and at target site. Nanoemulsions are submicron sized emulsion and consist of two immisible phase; one phase is oil phase other is aqueous phase. Size and shape of the particles dispersed in the continuous phase make distinction between the nanoemulsion and emulsions. The stability of nanoemulsion formulations can be maintained by a surfactant and co-surfactant. Clarity, high stability, and ease of preparation are the major advantages of Nanoemulsions. The present review emphasizes on overall advantage and disadvantage, various methods of preparation, characterization techniques and the various applications of sub micron size nanoemulison in different areas such as various route of administration, in chemotherapy, in cosmetic, etc.