As a malleable and novel tool for antigen recognition and modulation, nanobodies have the advantages of small size, easiness of expression, screening and modification, as well as high affinity and stability. Nanobodies are capable of recognizing more cryptic antigenic epitopes that are difficult to be recognized by traditional antibodies, making them increasingly used in the diagnosis and treatment of various diseases and assays. Nanobodies are also playing an irreplaceable role in the basic research. This review summarized the recent development of nanobodies and their derivatives in the detection of small molecules, pathogenic microorganisms and diagnosis of diseases, as well as in the fields of targeted therapies, cellular and molecular imaging. Broad prospects of nanobodies in the field of protein conformation studies were also reviewed.