In recent years, nanotechnology has been increasingly applied to the area of drug development. Nanoparticle-based therapeutics can confer the ability to overcome biological barriers, effectively deliver hydrophobic drugs and biologics, and preferentially target sites of disease. However, despite these potential advantages, only a relatively small number of nanoparticle-based medicines have been approved for clinical use, with numerous challenges and hurdles at different stages of development. The complexity of nanoparticles as multi-component three dimensional constructs requires careful design and engineering, detailed orthogonal analysis methods, and reproducible scale-up and manufacturing process to achieve a consistent product with the intended physicochemical characteristics, biological behaviors, and pharmacological profiles. The safety and efficacy of nanomedicines can be influenced by minor variations in multiple parameters and need to be carefully examined in preclinical and clinical studies, particularly in context of the biodistribution, targeting to intended sites, and potential immune toxicities. Overall, nanomedicines may present additional development and regulatory considerations compared with conventional medicines, and while there is generally a lack of regulatory standards in the examination of nanoparticle-based medicines as a unique category of therapeutic agents, efforts are being made in this direction. This review summarizes challenges likely to be encountered during the development and approval of nanoparticle-based therapeutics, and discusses potential strategies for drug developers and regulatory agencies to accelerate the growth of this important field.