Waterborne polyurethane (WPU) has been developed with an objective to protect the environment from volatile organic compounds (VOCs) and hazardous air pollutants (HAPs). But pristine WPU lacks vital properties for advanced applications necessary for a modern world. In this regard, several strategies and techniques have been developed to improve their inborn properties and to impart exciting new properties sometimes. One such mysterious route is the incorporation of appropriate nanomaterial in the WPU matrix for the formation of WPU nanocomposite (WPUNC). This modification amplifies the versatility of WPU to a maximum extent and produces advanced materials for different applications. Thus, the chapter discusses the WPUNC, including materials used, preparative methods, characterization, physico-chemical and thermo-mechanical properties, and their applications.