AbstractDefect engineering is an emerging technology for tailoring nanomaterials' characteristics and catalytic performance in various applications. Recently, defect‐engineered nanoparticles have emerged as highly researched materials in catalytic applications because of their exceptional redox reaction capabilities and physicochemical and optical properties. The properties of nanomaterials can be readily adjusted by controlling the nature and concentration of defects within the nanoparticles, avoiding the need for intricate design strategies. This review investigates defect engineering in nanocatalysts, including the design, fabrication, and applications. Initially, the various categories and strategies of nanomaterial defects and their impacts on the nanocatalysts' electronic and surface properties, catalytic activity, selectivity, and stability are summarized. Then, the catalytic processes and their uses, including gas sensing, hydrogen (H₂) evolutions, water splitting, reductions of carbon dioxide (CO₂) and nitrogen to value‐aided products, pollutant degradation, and biomedical (oncotherapy, antibacterial and wound healing, and biomolecular sensing) applications are discussed. Finally, the limitations in defect engineering and the prospective paths for allowing the logical design and optimization of nanocatalytic materials for long‐term and efficient applications are also examined. This comprehensive review gives unique insights into the current state of defect engineering in nanocatalysts and inspires future research on exploiting shortcomings to improve and customize catalytic performance.