Drug nanonization and encapsulation efficiency enhancement are prerequisites for hydrophobic and hydrophilic drugs to be delivered at the targeted site. Microfluidic technology has emerged as an efficient technique to achieve these objectives due to its ability to provide intensive mixing and yield relatively uniform nanosized particles. Furthermore, microfluidic technology has been established as a promising method to develop novel drug delivery systems with uniform particle size and distribution, reducing batch variation with controlled drug delivery capabilities. This extensive review introduces various applications of microfluidic systems for synthesizing controlled-sized organic and inorganic nanoparticles, followed by a discussion on micromixers and their recent advancements in drug delivery systems. We have reviewed the vital role of spray and freeze-drying in nanoparticle production. In addition, we have highlighted the concept and compared a microreactor-assisted spray and freeze dryer for developing a new innovative drug delivery platform. Finally, a critical discussion is presented on several recent patents on microfluidics along with applicable drying technologies.