The increasing global commitment to carbon neutrality has propelled a heightened focus on sustainable construction materials, with wood emerging as pivotal due to its environmental benefits. This review explores the development and application of eco-friendly polymer nanocomposite coatings to enhance wood's fire resistance, addressing a critical limitation in its widespread adoption. These nanocomposites demonstrate improved thermal stability and char formation properties by integrating nanoparticles, such as nano-clays, graphene oxide, and metal oxides, into biopolymer matrices. This significantly mitigates the flammability of wood substrates, creating a robust barrier against heat and oxygen. The review provides a comprehensive examination of these advanced coatings' synthesis, characterization, and performance. By emphasizing recent innovations and outlining future research directions, this review underscores the potential of eco-friendly polymer nanocomposite coatings as next-generation fire retardants. This advancement supports the expanded utilization of wood in sustainable construction practices and aligns with global initiatives toward achieving carbon neutrality.