A surprisingly large proportion of new chemical entities (NCE) is emerging from the drug discovery pipeline, and many active components extracted from herbal medicines are water insoluble, which represents a great challenge for their development. Nanosuspensions, which are submicron colloidal dispersions of pure drug particles that are stabilised by a small percentage of the excipients, could dramatically enhance the saturated solubility, dissolution rate and adhesion of drug particles to cell membranes. Nanosuspensions are the most suitable for drugs that require high dosing or have limited administrative volume. After 20 years of development, several oral products and one injectable product are commercially available. The aim of this review is to fill the gap between rational formulation designs and the in vivo performance of poorly water-soluble drug nanosuspensions. Specifically, this review will correlate characteristics of nanosuspension formulations, including drug property, particle size, crystallinity, stabiliser and surface property, with their transport, pharmacokinetics, bioactivity and toxicity after delivery by different administration routes. The elucidation of the mechanisms of targeted drug delivery, cellular transport and internalisation of nanosuspensions are also reviewed to interpret the in vivo performance of these nanosuspensions. Moreover, the recent application of nanosuspensions for poorly water-soluble herbal medicines is highlighted. © 2014 Bentham Science Publishers.