Nanotechnology can offer green and eco-friendly alternatives for plant disease management. Apart from being eco-friendly, fungi are used as bio-manufacturing units, which will provide an added benefit in being easy to use, as compared to other microbes. The non-pathogenic nature of some fungal species in combination with the simplicity of production and handling will improve the mass production of silver nanoparticles. Recently, a diverse range of fungi have been screened for their ability to create silver nanoparticles. Mycosynthesis of gold, silver, gold-silver alloy, selenium, tellurium, platinum, palladium, silica, titania, zirconia, quantum dots, usnic acid, magnetite, cadmium telluride and uraninite nanoparticles has also been reported by various researchers. Nanotechnological application in plant pathology is still in the early stages. For example, nanofungicides, nanopesticides and nanoherbicides are being used extensively in agriculture practices. Remote activation and monitoring of intelligent nano-delivery systems can assist agricultural growers of the future to minimize fungicides and pesticides use. Nanoparticle-mediated gene transfer would be useful for improvement of crops resistant to pathogens and pest. This review critically assesses the role of fungi in the synthesis of nanoparticles, the mechanism involved in the synthesis, the effect of different factors on the reduction of metal ions in developing low-cost techniques for the synthesis and recovery of nanoparticles. Moreover, the application of nanoparticles in plant disease control, antimicrobial mechanisms, and nanotoxicity on plant ecosystem and soil microbial communities has also been discussed in detail.