Iron oxide nanoparticles with unique magnetic properties have a high potential for use in several biomedical, bioengineering and in vivo applications, including tissue repair, magnetic resonance imaging, immunoassay, drug delivery, detoxification of biologic fluids, cell sorting, and hyperthermia. Although various surface modifications are being done for making these nonbiodegradable nanoparticles more biocompatible, their toxic potential is still a major concern. The current in vitro study of the interaction of superparamagnetic iron oxide nanoparticles of mean diameter 30 nm coated with Tween 80 and murine macrophage (J774) cells was undertaken to evaluate the dose- and time-dependent toxic potential, as well as investigate the role of oxidative stress in the toxicity. A 15-30 nm size range of spherical nanoparticles were characterized by transmission electron microscopy and zeta sizer. MTT assay showed >95% viability of cells in lower concentrations (25-200 μg/mL) and up to three hours of exposure, whereas at higher concentrations (300-500 μg/mL) and prolonged (six hours) exposure viability reduced to 55%-65%. Necrosis-apoptosis assay by propidium iodide and Hoechst-33342 staining revealed loss of the majority of the cells by apoptosis. H₂DCFDDA assay to quantify generation of intracellular reactive oxygen species (ROS) indicated that exposure to a higher concentration of nanoparticles resulted in enhanced ROS generation, leading to cell injury and death. The cell membrane injury induced by nanoparticles studied using the lactate dehydrogenase assay, showed both concentration- and time-dependent damage. Thus, this study concluded that use of a low optimum concentration of superparamagnetic iron oxide nanoparticles is important for avoidance of oxidative stress-induced cell injury and death.