The very dynamic growth of nanotechnology, nanomaterials (sized 1-100 nm) and their medical applications over the past 10 years has promised to add a new impetus to the diagnostics and therapeutics of a wide range of human pathologies, including cancer, cardiovascular diseases and diseases of the central nervous system. This growth in nanomedicine also fuels advances in bioengineering, regenerative medicine and the development of medical devices. However, as with all new pharmaceuticals and medical devices, new opportunities are inherently accompanied by new challenges due to the ability of nanomaterials to interact with the body on the cellular, subcellular and molecular levels. This article reviews some of the most compelling problems related to the nanopharmacology and nanotoxicology of nanomaterials. The overview focuses on opportunities emerging from the development of multifunctional nanomaterials and nanotheranostics for the diagnostics and therapy of both major and rare diseases. Challenges related to the hemocompatibility of nanomaterials are also discussed.