Dry eye disease (DED) is a common multifactorial disease linked to the tears/ocular surface leading to eye discomfort, ocular surface damage, and visual disturbance. Antiinflammatory agents (steroids and cyclosporine A), hormonal therapy, antibiotics, nerve growth factors, essential fatty acids are used as treatment options of DED. Current therapies attempt to reduce the ocular discomfort by producing lubrication and stimulating gland/nerve(s) associated with tear production, without providing a permanent cure for dry eye. Nanocarrier systems show a great promise to revolutionize drug delivery in DED, offering many advantages such as site specific and sustained delivery of therapeutic agents. This review presents an overview, pathophysiology, prevalence and etiology of DED, with an emphasis on preclinical and clinical studies involving the use of nanocarrier systems in treating DED. Lay Summary: Dry eye disease (DED) is a multifactorial disease associated with tear deficiency or excessive tear evaporation. There are several review articles that summarize DED, disease symptoms, causes and treatment approaches. Nanocarrier systems show a great promise to revolutionize drug delivery in DED, offering many advantages such as site specific and sustained delivery of therapeutic agents. Very few review articles summarize the findings on the use of nanotherapeutics in DED. In this review, we have exclusively discussed the preclinical and clinical studies of nanotherapeutics in DED therapy. This information will be attractive to both academic and pharmaceutical industry researchers working in DED therapeutics. © 2020 Bentham Science Publishers.