Electrochemical biosensors and associated lab-on-a-chip devices are the analytical system of choice when rapid and on-site results are needed in medical diagnostics and food safety, for environmental protection, process control, wastewater treatment, and life sciences discovery research among many others. A premier example is the glucose sensor used by diabetic patients. Current research focuses on developing sensors for specific analytes in these application fields and addresses challenges that need to be solved before viable commercial products can be designed. These challenges typically include the lowering of the limit of detection, the integration of sample preparation into the device and hence analysis directly within a sample matrix, finding strategies for long-term in vivo use, etc. Today, functional nanomaterials are synthesized, investigated, and applied in electrochemical biosensors and lab-on-a-chip devices to assist in this endeavor. This review answers many questions around the nanomaterials used, their inherent properties and the chemistries they offer that are of interest to the analytical systems, and their roles in analytical applications in the past 5 years (2013–2018), and it gives a quantitative assessment of their positive effects on the analyses. Furthermore, to facilitate an insightful understanding on how functional nanomaterials can be beneficial and effectively implemented into electrochemical biosensor-based lab-on-a-chip devices, seminal studies discussing important fundamental knowledge regarding device fabrication and nanomaterials are comprehensively included here. The review ultimately gives answers to the ultimate question: “Are they really needed or can bulk materials accomplish the same?” Finally, challenges and future directions are also discussed.