Nanoparticles (NPs) have emerged as attractive vehicles for targeted medication delivery to hair follicles (HFs), providing increased therapeutic efficacy while minimizing systemic side effects. This comprehensive review investigates the various applications of NPs in HF-targeted drug delivery, emphasizing polymeric, lipid, metallic, and other specialized NPs. Key physicochemical features such as size and content influence NP penetration depth and follicular targeting efficacy. NPs ranging in size from 400 nm to 700 nm penetrate HFs most successfully, with polymeric and lipid NPs showing particular promise because of their biocompatibility and customised release patterns. Drug delivery using polymeric nanoparticles (NPs) is a reliable method, and finasteride (FIN) and dutasteride for alopecia treatments have been effectively administered by NPs like poly(lactic acid) (PLA) and poly(lactic-co-glycolic acid) (PLGA). Lipid nanoparticles (NPs), such as solid lipid NPs (SLNs) and nanostructured lipid carriers (NLCs), provide long-term drug release and have a preference for high-sebum HF settings, which improves follicular absorption. Deeper penetration into HFs is made possible by the special qualities of metallic NPs, such as gold and iron oxide NPs, through treatments like plasmonic heating and magnetic targeting. Effective medication distribution to the hair bulb and supra bulbar region—critical areas for controlling hair growth cycles—remains a challenge. Techniques like surface modification with bioactive compounds and NP size optimization show potential for improving NP delivery to these deep HF areas. To ensure the safe and efficient treatment of hair diseases, more research is required despite breakthroughs to optimise NP formulations for therapeutic uses. The promise of NPs to transform therapeutic methods for alopecia and other HF-related illnesses is highlighted in this review, which compiles recent developments and obstacles in NP-based drug delivery to HFs.