The Shockley-Queisser limit describes the maximum solar energy conversion efficiency achievable for a particular material and is the standard by which new photovoltaic technologies are compared. This limit is based on the principle of detailed balance, which equates the photon flux into a device to the particle flux (photons or electrons) out of that device. Nanostructured solar cells represent a novel class of photovoltaic devices, and questions have been raised about whether or not they can exceed the Shockley-Queisser limit. Here we show that single-junction nanostructured solar cells have a theoretical maximum efficiency of ∼42% under AM 1.5 solar illumination. While this exceeds the efficiency of a non-concentrating planar device, it does not exceed the Shockley-Queisser limit for a planar device with optical concentration. We consider the effect of diffuse illumination and find that with optical concentration from the nanostructures of only × 1,000, an efficiency of 35.5% is achievable even with 25% diffuse illumination. We conclude that nanostructured solar cells offer an important route towards higher efficiency photovoltaic devices through a built-in optical concentration.