Wearable diabetic healthcare devices have attracted great attention for real-time continuous glucose monitoring (CGM) using biofluids such as tears, sweat, saliva, and interstitial fluid via noninvasive ways. In response to the escalating global demand for CGM, these devices enable proactive management and intervention of diabetic patients with incorporated drug delivery systems (DDSs). In this context, multifunctional nanomaterials can trigger the development of innovative sensing and management platforms to facilitate real-time selective glucose monitoring with remarkable sensitivity, on-demand drug delivery, and wireless power and data transmission. The seamless integration into wearable devices ensures patient's compliance. This comprehensive review evaluates the multifaceted roles of these materials in wearable diabetic healthcare devices, comparing their glucose sensing capabilities with conventionally available glucometers and CGM devices, and finally outlines the merits, limitations, and prospects of these devices. This review would serve as a valuable resource, elucidating the intricate functions of nanomaterials for the successful development of advanced wearable devices in diabetes management.