The 19-year-old looked set to join Peterborough on a permanent deal last month having helped Posh win promotion to the Championship while on loan there for the whole of last season.
But the move fell through and Blades boss Danny Wilson has now stepped in to secure his services until January 3, 2012.
"He is just what we need right now," Wilson told the club's official website.
"Nathaniel is strong, fast and will be a good addition to our squad as we look to make a powerful start."
Mendez-Laing , who is yet to make a first-team appearance for Wolves, is set to go straight into the squad for Saturday's big kick-off away to Oldham.