The complex multiscale physics of nanoparticle laden functional droplets in a reacting environment is of fundamental and applied significance for a wide variety of applications ranging from thermal sprays to pharmaceutics to modern day combustors using new brands of bio-fuels. Understanding the combustion characteristics of these novel fuels (laden with energetic nanoparticle NP) is pivotal for lowering ignition delay, reducing pollutant emissions and increasing the combustion efficiency in next generation combustors. On the way to understanding the complex dynamics of sprays is to first study the behaviour of an isolated droplet. A single droplet represents a sub-grid unit of spray. In vaporizing functional droplets under high heat flux conditions, the bubble formation inside the droplet represents an unstable system. This may be either through homogenous nucleation at the superheat limit or by dispersed nanoparticle acting as heterogeneous nucleation sites. First it is shown that such self-induced boiling in burning functional pendant droplets can induce severe volumetric shape oscillations in the droplet. Internal pressure build-up due to ebullition activity force ejects bubbles from the droplet domain causing undulations on the droplet surface and oscillations in bulk thereby leading to secondary break-up of the primary droplet. Through experiments, it is established that the degree of droplet deformation depends on the frequency and intensity of these bubble expulsion events. However, in a distinct regime of single isolated bubble growing inside the droplet, pre-ejection transient time is identified by Darrieus-Landau (DL) instability at the evaporative bubble-droplet interface. In this regime the bubble-droplet system behaves as a synchronized driver-driven system with bulk bubble-shape oscillations being imposed on the droplet. However, the agglomeration of suspended anaphase additives modulates the flow structures within the droplet and also influences the bubble inception and growth leading to distinct atomization characteristics. Secondly, the secondary atomization characteristics of burning bi-component (ethanol-water) droplets containing titania nanoparticle (NPs) at both dilute (0.5% and 1% by weight) and dense particle loading rates (PLR: 5% and 7.5 wt. %) are studied experimentally at atmospheric pressure under normal gravity. It is observed that both types of nanofuel droplets undergo distinct modes of secondary break-up that are primarily responsible for transporting particles from the droplet domain to the flame zone. For dilute nanosuspensions, disruptive response is characterized by low intensity atomization modes that cause small-scale localized flame distortion. In contrast, the disruption behavior at dense concentrations is governed by high intensity bubble ejections which result in severe disruption of the flame envelope. The atomization events occur locally at the droplet surface while their cumulative effect is observed globally at the droplet scale. Apart from this, a feedback coupling between two key interacting mechanisms, namely, atomization frequency and particle agglomeration also influence the droplet deformation characteristics by regulating the effective mass fraction of NPs within the droplet. Thus, third part of the study elucidates how the initial NP concentration modulates the relative dominance of these two mechanisms thereby leading to a master-slave configuration. Secondary atomization of novel nanofuels is a crucial process since it enables an effective transport of dispersed NPs to the flame (a pre-requisite condition for NPs to burn). Contrarily, NP agglomeration at the droplet surface leads to shell formation thereby retaining NPs inside the droplet. In particular, it is shown that at dense concentrations shell formation (master process) dominates over secondary atomization (slave) while at dilute particle loading it is the high frequency bubble ejections (master) that disrupt shell formation (slave) through its rupture and continuous out flux of NPs. These results in distinct combustion residues at dilute and dense concentrations, thus, providing a method of manufacturing flame synthesized microstructures with distinct morphologies. Next, it is shown that by using external stimuli (preferential acoustic excitation) the secondary atomization of the droplet can be suppressed i.e. the external flame-acoustic interaction with bubbles inside the droplet results in controlled droplet deformation. Particularly, by exciting the droplet flame in a critical, responsive frequency range i.e. 80 Hz ≤ fP ≤ 120 Hz, the droplet deformation cycle is altered through suppression of self-excited instabilities and intensity/frequency of bubble ejection events. The acoustic tuning also enables the control of bubble dynamics, bulk droplet-shape distortion and final precipitate morphology even in burning nanoparticle laden droplets. Droplets in a non-reacting environment (heated radioactively) are also subject to instabilities. One such instability observed in drying colloidal droplets is the buckling of thin viscoelastic shell formed through consolidation of NPs. In the final part of the thesis, buckling instability driven morphology transition (sphere to ring structure) in an acoustically levitated heated nanosilica dispersion droplet is elucidated using dynamic energy balance. Droplet deformation featuring formation of symmetric cavities is initiated by the capillary pressure that is two to three orders of magnitude greater than acoustic radiation pressure, thus indicating that the standing pressure field has no influence on the buckling front kinetics. With increase in heat flux, the growth rate of surface cavities and their post-buckled volume increases while the buckling time period reduces, thereby altering the buckling pathway and resulting in distinct precipitate structures. Thus, the cavity growth is primarily driven by evaporation. However, irrespective of the heating rate, volumetric droplet deformation exhibits linear time dependence and droplet vaporization is observed to deviate from the classical D2-law. Understanding such transients of buckling phenomenon in drying colloidal suspensions is pivotal for producing new functional microstructures with tenable morphology and is particularly critical for spray drying applications that produce powders through vaporization of colloidal droplets.