To eliminate the negative effect of traditional metal-working fluids and achieve sustainable manufacturing, the usage of nano-enhanced biolubricant (NEBL) is widely researched in minimum quantify lubrication (MQL) machining. It’s improved tool wear and surface integrity have been preliminarily verified by experimental studies. The previous review papers also concluded the major influencing factors of processability including nano-enhancer and lubricant types, NEBL concentration, micro droplet size, and so on. Nevertheless, the complex action of NEBL, from preparation, atomization, infiltration to heat transfer and anti-friction, is indistinct which limits preparation of process specifications and popularity in factories. Especially in the complex machining process, in-depth understanding is difficult and meaningful. To fill this gap, this paper concentrates on the comprehensive quantitative assessment of processability based on tribological, thermal, and machined surface quality aspects for NEBL application in turning, milling, and grinding. Then it attempts to answer mechanisms systematically considering multi-factor influence of molecular structure, physicochemical properties, concentration, and dispersion. Firstly, this paper reveals advanced lubrication and heat transfer mechanisms of NEBL by quantitative comparison with biolubricant-based MQL machining. Secondly, the distinctive film-formation, atomization, and infiltration mechanisms of NEBL, as distinguished from metal-working fluid, are clarified combining with its unique molecular structure and physical properties. Furtherly, the process optimization strategy is concluded based on the synergistic relationship analysis among process variables, physicochemical properties, machining mechanisms, and performance of NEBL. Finally, the future development directions are put forward aiming at current performance limitations of NEBL, which requires improvement on preparation and jet methods respects. This paper will help scientists deeply understand effective mechanism, formulate process specifications, and find future development trend of this technology.