BACKGROUND: It is widely believed that engineered nanomaterials will be increasingly used in biomedical applications. However, before these novel materials can be safely applied in a clinical setting, their biocompatibility, biodistribution and biodegradation needs to be carefully assessed. SCOPE OF REVIEW: There are a number of different classes of nanoparticles that hold promise for biomedical purposes. Here, we will focus on some of the most commonly studied nanomaterials: iron oxide nanoparticles, dendrimers, mesoporous silica particles, gold nanoparticles, and carbon nanotubes. MAJOR CONCLUSIONS: The mechanism of cellular uptake of nanoparticles and the biodistribution depend on the physico-chemical properties of the particles and in particular on their surface characteristics. Moreover, as particles are mainly recognized and engulfed by immune cells special attention should be paid to nano-immuno interactions. It is also important to use primary cells for testing of the biocompatibility of nanoparticles, as they are closer to the in vivo situation when compared to transformed cell lines. GENERAL SIGNIFICANCE: Understanding the unique characteristics of engineered nanomaterials and their interactions with biological systems is key to the safe implementation of these materials in novel biomedical diagnostics and therapeutics. This article is part of a Special Issue entitled Nanotechnologies - Emerging Applications in Biomedicine.