Display omitted •Different techniques involved in the green nanoparticle preparation are reviewed.•Factors affecting the preparation, properties of green nanoparticles are presented.•Green nanofluids as an alternative working fluid in thermal system are reviewed.•Toxicity, Economic and environmental impact of green nanofluids is discussed.•Key Challenges and future perspectives of green nanofluids are discussed. An increase in energy demand is leading to the continuous rise in global temperature above pre-industrial levels with the discharges of toxic gases and radiations leading to severe climatical circumstances. Thus, it is mandatory to develop ever-lasting, highly efficient thermal systems to overcome this issue. Scientific works on different nanofluids for enhancing performance in thermal applications have gained attention significantly over the last few years owing to their superior qualities. However, it increases safety and health concerns as they are generally more reactive in solvents. Also, other undesired effects such as corrosion of the equipment, non-biodegradable byproducts occur due to the presence of strong chemicals. Therefore, developing cost-effective, and eco-friendly nanofluids has emerged as an alternate research area that is rapidly growing with a great deal of interest. The current review gives a comprehensive view of the different techniques utilized in the preparation of green nanofluids using several natural extracts. Unique morphology, optical properties, stability, high surface area, less toxicity, and enhanced thermo-physical properties of green nanoparticles makes them a favorable candidate in enhancing the performance of thermal systems. Further, various factors affecting the preparation of green nanofluids are highlighted in addition to the evaluation and enhancement techniques concerning the stability and thermophysical properties. Recent experimental and numerical works on the effect of green nanofluids in thermal systems are critically analyzed and provide an overview from economic and environmental perspectives. The challenges and future developments are highlighted to ensure safer health and environment using nanofluids.