Combustion-derived and synthetic nano-sized particles (NSP) have gained considerable interest among pulmonary researchers and clinicians for two main reasons. 1) Inhalation exposure to combustion-derived NSP was associated with increased pulmonary and cardiovascular morbidity and mortality as suggested by epidemiological studies. Experimental evidence has provided a mechanistic picture of the adverse health effects associated with inhalation of combustion-derived and synthetic NSP. 2) The toxicological potential of NSP contrasts with the potential application of synthetic NSP in technological as well as medicinal settings, with the latter including the use of NSP as diagnostics or therapeutics. To shed light on this paradox, this article aims to highlight recent findings about the interaction of inhaled NSP with the structures of the respiratory tract including surfactant, alveolar macrophages, and epithelial cells. Cellular responses to NSP exposure include the generation of reactive oxygen species and the induction of an inflammatory response. Furthermore, this review places special emphasis on methodological differences between experimental studies and the caveats associated with the dose metrics and points out ways to overcome inherent methodological problems.