Currently, fungal infections are becoming more prevalent worldwide. Subsequently, many antifungal agents are available to cure diseases like pemphigus, athlete's foot, acne, psoriasis, hyperpigmentation, albinism, and skin cancer. Still, they fall short due to pitfalls in physiochemical properties. Conventional medications like lotion, creams, ointments, poultices, and gels are available for antifungal therapy but present many shortcomings. They are associated with drug retention and poor penetration problems, resulting in drug resistance, hypersensitivity, and diminished efficacy. On the contrary, nanoformulations have gained tremendous potential in overcoming the drawbacks of conventional delivery. Furthermore, the potential breakthroughs of nanoformulations are site-specific targeting. It has improved bioavailability, patient-tailored approach, reduced drug retention and hypersensitivity, and improved skin penetration. Nowadays, nanoformulations are gaining popularity for antifungal therapy against superficial skin infections. Nanoformulations-based liposomes, niosomes, nanosponges, solid lipid nanoparticles, and potential applications have been explored for antifungal therapy due to enhanced activity and reduced toxicity. Researchers are now more focused on developing patient-oriented target-based nano delivery to cover the lacunas of conventional treatment with higher immune stimulatory effects. Future direction involves the construction of novel nanotherapeutic devices, nanorobotics, and robust methods. In addition, for the preparations of nanoformulations for clinical studies, animal modeling solves the problems of antifungal therapy. This review describes insights into various superficial fungal skin infections and their potential applications, nanocarrier-based drug delivery, and mechanism of action. In addition, it focuses on regulatory considerations, pharmacokinetic and pharmacodynamic studies, clinical trials, patents, challenges, and future inputs for researchers to improve antifungal therapy.