With the development of nanotechnology, nanometer-sized products smaller than several 100 nm have been applied for all areas of science and technology. The nanometer-sized products, including carbon nanotubes, fullerene derivatives, and nanocrystals made of various materials, are widely employed as novel tools in various fields, not only in material engineering, electronics, plastics, automobile, aviation, and aerospace industries, but also even in cellular biology, molecular biology, and basic and clinical medical fields. In particular, nanocrystal quantum dots (QDs) have been widely used in biological and medical studies because of their far brighter photoemission and photostability. The physical and chemical properties of QDs have been circumstantially investigated, but little is known about the potential harmful effects of QDs on human health. In addition to the physical and chemical properties of the QDs, their toxicity and biological behavior are generally regulated by three other conditions: (1) the QD core material itself, (2) the surface modifications of the QD, and (3) the external environmental condition of the QDs. We herein report on the in vitro and in vivo toxicity and biological behavior of nanocrystals such as QDs. Accumulating evidence suggests that the QD-capping material, rather than the core metalloid complex, is responsible for the majority of their toxicity and biological activity. For example, molecules covered with a toxic agent showed cytotoxicity, whereas QDs conjugated with biomolecules retained the biological effects of the conjugate.