Graphene oxide (GO) has attracted intense interest for use in living systems and environmental applications. GO's compatibility with mammalian cells is sometimes inferred from its low cytotoxicity, but such conclusions ignore non-lethal effects that will influence GO's utility. Here we demonstrate, with rat basophilic leukemia (RBL) cells, profound plasma membrane (PM) ruffling and shedding induced by GO using confocal and live cell fluorescence microscopy, as well as scanning electron microscopy. These membrane structures contain immunoglobulin E receptors, are resistant to detergents, and lack detectable fluorescence labeling of F-actin and fibronectin. The formation of these membrane structures correlates with a loss of contact inhibition between RBL cells. We observe similar cellular responses towards GO for NIH-3T3 fibroblast cells and MDA-MB-231 human breast cancer cells. These findings reveal a previously unreported cellular response towards foreign nanomaterials. Membrane ruffling and shedding raise fundamental questions about how GO interacts with the PM, as well as its potential to modulate cellular mechanosensing for tissue engineering, stem cell differentiation, and other biomedical applications.