Suspension array or liquid biochips technique based on spectrometrically encoded microspheres plays a prominent role in simultaneously high-throughput multiplexed detection of multiple analytes within a small, single sample volume. It is a quite powerful tool for genes analysis, proteins profiling, disease early diagnosis, treatment monitoring and so on, due to its faster binding kinetics, high-throughput multiplexed detection, high detection sensitivity, and good reproducibility. Commercial suspension array platforms based on organic dye-encoded microspheres show various limitations such as limited encoding capacity, sensitivity, photostability, requirement of instruments with multiple excitation, tedious color compensation processes, etc. Substantial development has been achieved in improving the multiplexed detecting capability, detection sensitivity, and automatic platform of suspension arrays due to the rapid growth of nanotechnology and nanomaterials. In this review, we systematically introduce the recent progress on functional nanomaterials based suspension array technology, including functional nanoparticles-encoded microspheres and their fabrication technologies, design and regulation of suspension arrays. At last, we make a summary of the current challenges and their possible solutions in suspension array technology. We hope that our review on the recent progress, current challenges, possible solutions and the future prospects of suspension array based on encoded microspheres, will help drive the development of suspension array technology and its related fields.