Bacillus Calmette-Guérin (BCG) immunotherapy has been a cornerstone treatment for non-muscle invasive bladder cancer for decades and still faces challenges, such as severe immune adverse reactions, which reduce its use as a first-line treatment. This review examines BCG therapy’s history, mechanisms, and current status, highlighting how nanotechnology and bioengineering are revitalizing its application. We discuss novel nanocarrier systems aimed at enhancing BCG's efficacy while mitigating specific side effects. These approaches promise improved tumor targeting, better drug loading, and enhanced stimulation of anti-tumor immune responses. Key strategies involve using functional BCG cell wall components and co-delivering BCG with chemotherapeutics to achieve synergistic effects. While most studies remain experimental, this research direction offers hope for overcoming BCG's limitations and advancing bladder cancer immunotherapy. Further elucidation of BCG's mechanisms and rigorous safety evaluations of new delivery systems will be crucial for translating these innovations into clinical practice.