The investigations on anthropogenic carbon dioxide (CO2) capture and conversion play a vital role in eradicating global warming and the energy crisis. In this context, defect-engineered two-dimensional (2D) nanomaterials have received much attention in recent years. Herein, the significance of 2D nanomaterials such as graphene, transition metal dichalcogenides, hexagonal boron nitride, MXenes, graphitic carbon nitride, metal/covalent organic frameworks, nanoclays, borophenes, graphynes and green phosphorenes for CO2 capture and conversion has been emphasized. Further, the intrinsic mechanism of CO2 adsorption and conversion is discussed in detail. Theoretical and experimental studies among 2D materials highlight that N-doped porous adsorbents based on graphene and MXenes are more suitable for CO2 adsorption applications. Also, more emphasis is given to outlining and discussing the role of various 2D nanomaterials and their hybrids as photocatalysts, electrocatalysts, photoelectrocatalysts, and thermocatalysts to transform CO2 into valuable products. Although immense efforts are deployed in developing 2D catalysts for the conversion of CO2, challenges such as agglomeration, poor yield, difficulties in analysing the 2D structures for catalytic factors, poor knowledge and in-depth understanding of the reaction mechanisms, high cost, etc. limit their large scale production and commercialization. More detailed theoretical and experimental investigations are required to develop 2D nanostructures with optimum properties for large-scale capture and conversion of CO2.