Glass containing optically active nanoparticles have been manufactured for centuries. However, only in the early 1900s, the invention of ultramicroscope and development of Mie theory paved the way to discovering the occurrence of nanoparticles in glass and their special role in imparting unique optical properties to glass. This groundbreaking insight inspired scientists to extensively research such nanoparticles‐in‐glass hybrid optical materials, which led to a series of fundamental breakthroughs (e.g., invention of glass ceramics, discovery of quantum dots) and commercial successes (e.g., photosensitive glass, photochromic glass, dichromic polarizer). Over the past decades, a new wave of research in this area has been initiated by opportunities of incorporating a large variety of synthetic nanoparticles in glass, which promises the development of advanced functional devices for lighting, display, smart window, data storage, and sensing applications. Recent development of various approaches of fabricating nanoparticles‐in‐glass hybrid optical materials and postmodifying nanoparticles that are embedded in glass is reviewed. The state‐of‐the‐art techniques relevant to controlling the dispersion, distribution, orientation, and nanostructure of nanoparticles in glass, as well as manipulating the macroscopic performance of the hybrid materials are discussed. Examples of applications with promising pathway to commercially viable devices based on hybrid optical materials are outlined. The integration of optically active nanoparticles within a glass matrix is reviewed to provide a comprehensive discussion on the various techniques that are widely used to embed and postmodify nanoparticles in glass, and state‐of‐the‐art applications of their prototype devices that have been developed.