Nanotechnology is a fast growing field that provides for the development of materials that have new dimensions, novel properties, and a broader array of applications. Various scientific groups are keen about this technology and are devoting themselves to the development of more, new, and better nanomaterials. In the near future, expectations are that no field will be left untouched by the magical benefits available through application of nanotechnology. Presently, there is only limited knowledge concerning the toxicological effects of NPs. However, it is now known that the toxic behavior of NPs differ from their bulk counterparts. Even NPs that have the same chemical composition differ in their toxicological properties; the differences in toxicity depend upon size, shape, and surface covering. Hence, before NPs are commercially used it is most important that they be subjected to appropriate toxicity evaluation. Among the parameters of NPs that must be evaluated for their effect on toxicity are surface charges, types of coating material, and reactivity of NPs. In this article, we have reviewed the literature pertinent to the toxicity of metal oxide NPs, metallic NPs, quantum dots (QDs), silica (SiO2) NPs, carbon nanotubes (CNTs), and certain other carbon nanomaterials (NMs). These NPs have already found a wide range of applications around the world. In vitro and in vivo studies on NPs have revealed that most are toxic to animals. However, their toxic behavior varies with their size, shape, surface charge, type of coating material and reactivity. Dose, route of administration, and exposure are critical factors that affect the degree of toxicity produced by any particular type of NP. It is for this reason that we believe a careful and rigorous toxicity testing is necessary before any NP is declared to be safe for broad use. We also believe that an agreed upon testing system is needed that can be used to suitably, accurately, and economically assess the toxicity of NPs. NPs have produced an array of different toxic effects in many different types of in vivo and in vitro studies. The types of effects that NPs have produced are those on the pulmonary, cardiac, reproductive, renal and cutaneous systems, as well as on various cell lines. After exposures, significant accumulations of NPs have been found in the lungs, brain, liver, spleen, and bones of test species. It has been well established that the degree of toxicity produced by NPs is linked to their surface properties. Soluble NPs are rendered toxic because of their constituents; however, the situation is entirely different for insoluble NPs. Stable metal oxides do not show any toxicity, whereas metallic NPs that have redox potential may be cytotoxic and genotoxic. The available data on NP toxicity is unfortunately limited, and hence, does not allow scientists to yet make a significant quantitative risk assessment of the safety of synthesized NPs. In this review, we have endeavored to illustrate the importance of having and using results from existing nanotoxicological studies and for developing new and more useful future risk assessment systems. Increased efforts of both an individual and collective nature are required to explore the future pros and cons of nanotechnology.