To date, various nanodrug systems have been developed for different routes of administration, which include dendrimers, nanocrystals, emulsions, liposomes, solid lipid nanoparticles, micelles, and polymeric nanoparticles. Nanodrug systems have been employed to improve the efficacy, safety, physicochemical properties, and pharmacokinetic/pharmacodynamic profile of pharmaceutical substances. In particular, functionalized nanodrug systems can offer enhanced bioavailability of orally taken drugs, prolonged half-life of injected drugs (by reducing immunogenicity), and targeted delivery to specific tissues. Thus, nanodrug systems might lower the frequency of administration while providing maximized pharmacological effects and minimized systemic side effects, possibly leading to better therapeutic compliance and clinical outcomes. In spite of these attractive pharmacokinetic advantages, recent attention has been drawn to the toxic potential of nanodrugs since they often exhibit in vitro and in vivo cytotoxicity, oxidative stress, inflammation, and genotoxicity. A better understanding of the pharmacokinetic and safety characteristics of nanodrugs and the limitations of each delivery option is necessary for the further development of efficacious nanodrugs with high therapeutic potential and a wide safety margin. This review highlights the recent progress in nanodrug system development, with a focus on the pharmacokinetic advantages and safety challenges.