Modification of nanomaterial surface through functionalization has created a great revolution in the field of nanotechnology specially in the field of pharmaceutical and biomedical sciences. The clinical results have suggested that functionalization of nanoparticles with specific chemical species yielded multifunctional nanoparticles with enhanced efficacy. Precisely engineered, functionalized nanoparticles are finding use as optical materials, components of sensors, catalyst precursors and a host for other applications. Functionalization of host molecules with inorganic/organic functional groups is a useful strategy in the preparation of advanced materials combining the optoelectronic and surface properties of the substrate with the molecular selectivity of the covering groups. Conjugation of these specific chemical functional groups create specific surface sites on nanoparticles with selective molecular attachment to perform specific functions viz. functionalization of gold nanoparticles with amino acids such as lysine, polylysine and glycine etc. bind DNA with higher efficiency for gene delivery without toxicity. Surface-functionalization firstly, links the nanoparticles with various organic and inorganic moieties, secondly, improves the solubility of nanoparticles so that they may be used as carriers for hydrophobic species and thirdly, they can be used for the homogeneous distribution in organic matrix.