Water-based suspensions with nanoparticles as additives have been developed to replace oil-based lubricants for green manufacturing. Optimisation of nanosuspension formulation can enhance their performance and thereby reduce manufacturing costs. Nevertheless, developing high-performance water-based nanosuspensions requires an in-depth understanding of the role of nanoadditives in lubrication. This review summarises the formulation of water-based nanosuspensions, their tribological properties, and lubrication mechanisms. Technical issues are systematically addressed concerning the applications of nanosuspensions in the rolling of steels, machining of difficult-to-cut metals, and abrasive shaping of hard-brittle ceramics. This review facilitates understanding water-based nanolubrication to enable formulating nanosuspensions with a satisfactory manufacturing performance. The review outcomes indicate that oxide-based nanosuspensions are suitable candidates for metal forming and machining processes due to their excellent anti-wear performance and high heat-carrying capacity. Carbon-based nanosuspensions are appropriate for ceramic shaping processes due to their excellent lubricity and superior resistance against abrasion. In particular, hybrid nanosuspensions consisting of at least two different types of nanoparticles demonstrate a superior synergistic performance in lubrication and cooling. They hence have great potential for future manufacturing processes for both ductile and brittle materials.