Cadmium telluride (CdTe) nanoparticles exhibit strong and stable fluorescence that is attractive for many applications such as biological probing and solid state lighting. The evaluation of nanoparticle toxicity is important for realizing these practical applications. However, no systematic studies of CdTe nanoparticle toxicity have been reported. We investigated and compared the size- and concentration-dependent cytotoxicity of CdTe nanoparticles in human hepatoma HepG2 cells using the MTT assay. CdTe nanoparticles elicited cytotoxicity in a concentration- and size-dependent manner, with smaller-sized particles exhibiting somewhat higher potency. Lesser cytotoxicity of partially purified CdTe-Red particles (following methanol precipitation and resuspension) suggested that free cadmium ions may contribute to cytotoxicity. We also evaluated the acute toxicity of CdTe-Red particles following intravenous exposure in male rats (2 micromol/kg). Few signs of functional toxicity or clinical (urinary or blood) changes were noted. Interestingly, motor activity was transiently reduced (2 hours after treatment) and then significantly increased at a later timepoint (24 hours after dosing). These studies provide a framework for further characterizing the in vitro and in vivo toxic potential of different types of CdTe nanoparticles and suggest that the nervous system may be targeted by these nanoparticles under some conditions.