Technologies based on nanomaterials are gaining increased attention as a promising method for the removal of contaminants and inactivation/killing of pathogenic microorganisms. Plasmonic nanomaterials prove to be promising in this field due to their tailored properties, including optical, photothermal, conducive, and catalytic properties. These properties have been widely used for the design of efficient materials for the environmental applications by improving the light absorption efficiency, redox reaction kinetic rates, and charge separation efficiency. In the current review, the tailored properties of plasmonic nanomaterials and how they are employed for the design of efficient environment-functional materials are discussed in detail. A number of examples for the development of composite plasmonic nanostructures such as metal/semiconductor, metal/insulator/semiconductor, and metal/semiconductor/semiconductor are provided. In addition, the recent achievements in plasmonic nanomaterials for the removal of contaminants (in both liquid and gaseous media) and the inactivation of pathogenic microorganisms are described with a number of examples. The major challenges in employing plasmonic nanomaterials for environmental applications are identified as: (1) complete mineralization of contaminants must be achieved in some cases due to the potential risks of intermediates; (2) the cost of plasmonic nanomaterials and the associated treatment processes need to be significantly decreased; (3) the stability of plasmonic nanomaterials in real environmental matrices is urgently needed to be improved; (4) the ecological safety of these nanomaterials should be investigated extensively. However, it is expected that with continuous progress of this field, plasmonic nanotechnology can be used for environmental applications more widely, not only for the examples shown in the current review, but also for soil remediation, resource recovery during waste treatment processes, and detection of contaminants. Finally, the toxicity of engineered plasmonic nanomaterials, the possibility of their release, fate, and transformation, in the environment and subsequent impact on the health of ecosystem are also addressed in detail.