In materials chemistry, green chemistry has established firm ground providing essential design criteria to develop advanced tools for efficient functionalization and modification of materials. Particularly, the combination of multicomponent reactions in water and aqueous media with materials chemistry unlocks a new sustainable way for constructing multi-functionalized structures with unique features, playing significant roles in the plethora of applications. Multicomponent reactions have received significant consideration from the community of material chemistry because of their great efficiency, simple operations, intrinsic molecular diversity, and an atom and a pot economy. Also, by rational design of multicomponent reactions in water and aqueous media, the performance of some multicomponent reactions could be enhanced by the contributing “natural” form of water-soluble materials, the exclusive solvating features of water, and simple separating and recovering materials. To date, there is no exclusive review to report the sustainable functionalization and modification of materials in water. This critical review highlights the utility of various kinds of multicomponent reactions in water and aqueous media as green methods for functionalization and modification of siliceous, magnetic, and carbonaceous materials, oligosaccharides, polysaccharides, peptides, proteins, and synthetic polymers. The detailed discussion of synthetic procedures, properties, and related applicability of each functionalized/modified material is fully deliberated in this review.