Rare earth elements are widely used in chemical engineering, the nuclear industry, metallurgy, medicine, electronics, and computer technology because of their unique properties. To fulfil ever increasing demands for these elements, recycling of rare-earth-element-containing products as well as their recovery from wastewater is quite important. In order to recover rare earth elements from wastewater, their adsorption from low-concentration aqueous solutions, by using nanomaterials, is investigated due to technological simplicity and high efficiency. This paper is a review of the state-of-the-art adsorption technologies of rare earth elements from diluted aqueous solutions by using various nanomaterials. Furthermore, desorption and reusability of rare earth metals and nanomaterials are discussed. On the basis of this review it can be concluded that laboratory testing indicates promising adsorption capacities, which depend significantly on nanomaterial type and adsorption conditions. The adsorption process, which mostly follows the Langmuir, Freundlich, Sips, and Temkin isotherms, is typically endothermic and spontaneous. Furthermore, pseudo-second order, pseudo-first order, and intra-particle diffusion models are the best models to describe the kinetics of adsorption. The dominant adsorption mechanisms are surface complexation and ion exchange. More investigation, however, will be required in order to synthesize appropriate, environmentally friendly, and efficient nanomaterials for adsorption of rare earth elements from real wastewater.