Enhanced oil recovery (EOR) has been widely used to recover residual oil after the primary or secondary oil recovery processes. Compared to conventional methods, chemical EOR has demonstrated high oil recovery and low operational costs. Nanofluids have received extensive attention owing to their advantages of low cost, high oil recovery, and wide applicability. In recent years, nanofluids have been widely used in EOR processes. Moreover, several studies have focused on the role of nanofluids in the nanofluid EOR (N-EOR) process. However, the mechanisms related to N-EOR are unclear, and several of the mechanisms established are chaotic and contradictory. This review was conducted by considering heavy oil molecules/particle/surface micromechanics; nanofluid-assisted EOR methods; multiscale, multiphase pore/core displacement experiments; and multiphase flow fluid-solid coupling simulations. Nanofluids can alter the wettability of minerals (particle/surface micromechanics), oil/water interfacial tension (heavy oil molecules/water micromechanics), and structural disjoining pressure (heavy oil molecules/particle/surface micromechanics). They can also cause viscosity reduction (micromechanics of heavy oil molecules). Nanofoam technology, nanoemulsion technology, and injected fluids were used during the EOR process. The mechanism of N-EOR is based on the nanoparticle adsorption effect. Nanoparticles can be adsorbed on mineral surfaces and alter the wettability of minerals from oil-wet to water-wet conditions. Nanoparticles can also be adsorbed on the oil/water surface, which alters the oil/water interfacial tension, resulting in the formation of emulsions. Asphaltenes are also adsorbed on the surface of nanoparticles, which reduces the asphaltene content in heavy oil, resulting in a decrease in the viscosity of oil, which helps in oil recovery. In previous studies, most researchers only focused on the results, and the nanoparticle adsorption properties have been ignored. This review presents the relationship between the adsorption properties of nanoparticles and the N-EOR mechanisms. The nanofluid behaviour during a multiphase core displacement process is also discussed, and the corresponding simulation is analysed. Finally, potential mechanisms and future directions of N-EOR are proposed. The findings of this study can further the understanding of N-EOR mechanisms from the perspective of heavy oil molecules/particle/surface micromechanics, as well as clarify the role of nanofluids in multiphase core displacement experiments and simulations. This review also presents limitations and bottlenecks, guiding researchers to develop methods to synthesise novel nanoparticles and conduct further research.