This paper presents a comprehensive overview of the potential applications for Photo-Acoustic (PA) imaging employing functional nanoparticles. The exploration begins with an introduction to nanotechnology and nanomaterials, highlighting the advancements in these fields and their crucial role in shaping the future. A detailed discussion of the various types of nanomaterials and their functional properties sets the stage for a thorough examination of the fundamentals of the PA effect. This includes a thorough chronological review of advancements, experimental methodologies, and the intricacies of the source and detection of PA signals. The utilization of amplitude and frequency modulation, design of PA cells, pressure sensor-based signal detection, and quantification methods are explored in-depth, along with additional mechanisms induced by PA signals. The paper then delves into the versatile applications of photoacoustic imaging facilitated by functional nanomaterials. It investigates the influence of nanomaterial shape, size variation, and the role of composition, alloys, and hybrid materials in harnessing the potential of PA imaging. The paper culminates with an insightful discussion on the future scope of this field, focusing specifically on the potential applications of photoacoustic (PA) effect in the domain of biomedical imaging and nanomedicine. Finally, by providing the comprehensive overview, the current work provides a valuable resource underscoring the transformative potential of PA imaging technique in biomedical research and clinical practice.