In this study, the effect of ZnO nanoparticles and ZnCl2 on growth, reproduction and accumulation of zinc in Daphnia magna was determined in a 21-day chronic toxicity test. A variety of techniques were used to distinguish the free zinc ion, dissolved, nanoparticle and aggregated zinc fraction in the Daphnia test medium. The results showed similar chronic effects on growth, reproduction and accumulation for the ZnO nanoparticles (EC10, 20, 50 reproduction: 0.030, 0.049, 0.112 mg Zn/l) and the ZnCl2 (EC10, 20, 50 reproduction: 0.014, 0.027, 0.082 mg Zn/l). A large fraction of the nanoparticles rapidly dissolved after introduction in the exposure medium. Aggregation of nanoparticles was also observed but within 48 h of exposure most of these ZnO aggregates were dissolved. Based on the combined dissolution kinetics and toxicity results, it can be concluded that the toxicological effects of ZnO nanoparticles at the chronic level can be largely attributed to the dissolved fraction rather than the nanoparticles or initially formed aggregates.