This state-of-the-art overview highlights the significance of high performance shape memory polymer/nanodiamond nanocomposites. Nanodiamond reinforced polymeric nanocomposites have been designed and advantageously studied for the design, microstructure, physical properties, structure–property relation/phenomenon, shape memory effects, and possible technical advancements. Nanodiamond filled polymer matrices studied for shape memory effects include polyesters, polyurethane, poly(N-isopropylacrylamide), epoxy, polyaniline, chitosan, etc. Addition of nanodiamond especially functional nanoparticles may develop physical and/or covalent interactions with matrices to form interlinking/cross-linking network responsible for active shape fixing/recovery behavior. Noteworthy thermo-responsive, electroactive, photoactive, photothermal, and magnetic sensitive shape memory effects have been observed. Application areas of shape memory polymer/nanodiamond nanocomposites observed so far are smart strain sensing and wearable electronics, antibacterial and biosensing, and civil and engineering related areas.