The delivery of drugs to brain is a daunting task due to the presence of multiple protective barriers. Nanoparticles (NPs), due to their ability to deliver and accumulate drugs in brain by crossing the blood brain barrier, have emerged as effective brain targeting drug delivery system. The major drawback of NPs obstructing their application in brain related diseases is neurotoxicity which leads to memory deficit, behavioural changes, changes in the structure and membrane potential of the neurons. An understanding of the molecular mechanisms associated with nanoparticle induced neurotoxicity is essential to solve the problem. NPs induce cytotoxicity, genotoxicity and epigenetic changes. This review focuses on nanoparticles, their physicochemical characteristics, manifestations of neurotoxicity and the mechanisms through which neurotoxicity is induced. This review may help in improving the understanding of the mechanisms associated with nanoparticle induced neurotoxicity so as to devise ways to overcome the associated neurotoxicity.