Nanotechnology is concerned with the creation of particles and materials at nanoscale levels. Nanocomposite is a combination or matrix, in which different materials combine to develop new properties of the materials ensuring that one of the materials have size in range of 1-100 nm. Nanocomposites are classified according to the types of reinforcement materials and matrix materials used in their construction. Nanocomposites are divided into three types based on the matrix material: ceramic matrix nanocomposites (CMNC), polymer matrix nanocomposites (PMNC), and metal matrix nanocomposites (MMNC) (MMNC). The synthetic methods of nanocomposites are frequently classified in to two classes. These are top-down and bottom up approaches. The type of synthetic technique used is determined by the nanocomposites' intended properties. There are different wet methods for synthesis of metal nanoparticles and nanocomposites among these co-precipitations, sol gel and hydrothermal methods are cost effective as compared to other methods. The synthesized nanocomposites can be characterized using different techniques to get insight into the morphology, particle size, phase, composition, thermal stability, optical, magnetic, electrical and thermal properties. Also, nanocomposites are used in medical, pharmaceutical industry, food packaging, to electronics and energy industry. Thus this review focuses on the main ideas about synthesis, characterization and application of nanocomposites.