Administration of nanomaterials based medicinal and drug carrier systems into systemic circulation brings about interaction of blood components e.g. albumin and globulin proteins with these nanosystems. These blood or serum proteins either get loosely attached over these nanocarriers and form soft protein corona or are tightly adsorbed over nanoparticles and hard protein corona formation occurs. Formation of protein corona has significant implications over a wide array of physicochemical and medicinal attributes. Almost all pharmacological, toxicological and carrier characteristics of nanoparticles get prominently touched by the protein corona formation. It is this interaction of nanoparticle protein corona that decides and influences fate of nanomaterials-based systems. In this article, authors reviewed several diverse aspects of protein corona formation and its implications on various possible outcomes in vivo and in vitro. A brief description regarding formation and types of protein corona has been included along with mechanisms and pharmacokinetic, pharmacological behavior and toxicological profiles of nanoparticles has been described. Finally, significance of protein corona in context of its in vivo and in vitro behavior, involvement of biomolecules at nanoparticle plasma interface and other interfaces and effects of protein corona on biocompatibility characteristics have also been touched upon.