Metal oxide nanoparticles (MONPs) have emerged as one of the most significant classes of nanomaterials owing to their unique physicochemical, optical, catalytic, magnetic, and biological properties. Conventional synthesis approaches for MONPs often involve toxic reducing agents, high energy consumption, hazardous solvents, and environmentally harmful by-products. In recent years, green synthesis has gained considerable attention as an eco-friendly, cost-effective, sustainable, and biologically compatible alternative for nanoparticle production. Green synthesis utilizes natural resources such as plant extracts, bacteria, fungi, algae, biopolymers, and agricultural wastes for the reduction and stabilization of nanoparticles. This review comprehensively discusses the principles, mechanisms, and recent advances in the green synthesis of metal oxide nanoparticles. The article highlights various biological sources employed for nanoparticle fabrication, factors affecting synthesis, characterization techniques, and important classes of MONPs including zinc oxide, titanium dioxide, iron oxide, copper oxide, magnesium oxide, cerium oxide, nickel oxide, and aluminum oxide nanoparticles. Additionally, biomedical, environmental, catalytic, agricultural, energy, and sensing applications of green synthesized MONPs are critically discussed. The review further examines toxicity concerns, commercialization challenges, scalability issues, and future perspectives associated with green nanotechnology. The growing integration of nanotechnology with sustainable chemistry and biotechnology is expected to accelerate the development of environmentally benign nanoparticle synthesis routes for advanced industrial and biomedical applications.