Nanofluids could be used to provide cooling and lubrication action and to control thermo-physical and tribochemical properties of material processing. It is foreseen that properly designed nanofluids could surpass conventional cutting fluids with respect to thermal conductivity, convective heat transfer coefficient, critical heat flux, viscosity, and wettability. These properties have a promising potential to lead to the development of new coolants and lubricants with applications in a wide variety of materials processing technologies. This paper analyses the developments in research on the properties of nanofluids and evaluates their potential for applications in machining, focusing on their thermal and tribological aspects. The increasing use of nanofluids leads to a need for information on their sustainability in order to recogniye and avoid risks. Sustainability is discussed in view of occupational health and safety and toxicity of nanoparticles.