Paclitaxel is a broad-spectrum anticancer compound, which was derived mainly from a medicinal plant, in particular, from the bark of the yew tree Taxus brevifolia Nutt. It is a representative of a class of diterpene taxanes, which are nowadays used as the most common chemotherapeutic agent against many forms of cancer. It possesses scientifically proven anticancer activity against, e.g., ovarian, lung, and breast cancers. The application of this compound is difficult because of limited solubility, recrystalization upon dilution, and cosolvent-induced toxicity. In these cases, nanotechnology and nanoparticles provide certain advantages such as increased drug half-life, lowered toxicity, and specific and selective delivery over free drugs. Nanodrugs possess the capability to buildup in the tissue which might be linked to enhanced permeability and retention as well as enhanced antitumour influence possessing minimal toxicity in normal tissues. This article presents information about paclitaxel, its chemical structure, formulations, mechanism of action, and toxicity. Attention is drawn on nanotechnology, the usefulness of nanoparticles containing paclitaxel, its opportunities, and also future perspective. This review article is aimed at summarizing the current state of continuous pharmaceutical development and employment of nanotechnology in the enhancement of the pharmacokinetic and pharmacodynamic features of paclitaxel as a chemotherapeutic agent.