The surfaces of pristine nanoparticles become rapidly coated by proteins in biological fluids, forming the so-called protein corona. The corona modifies key physicochemical characteristics of nanoparticle surfaces that modulate its biological and pharmacokinetic activity, biodistribution, and safety. In the two decades since the protein corona was identified, the importance of nanoparticles surface properties in regulating biological responses have been recognized. However, there is still a lack of clarity about the relationships between physiological conditions and corona composition over time, and how this controls biological activities/interactions. Here we review recent progress in characterizing the structure and composition of protein corona as a function of biological fluid and time. We summarize the influence of nanoparticle characteristics on protein corona composition and discuss the relevance of protein corona to the biological activity and fate of nanoparticles. The aim is to provide a critical summary of the key factors that affect protein corona formation (e.g. characteristics of nanoparticles and biological environment) and how the corona modulates biological activity, cellular uptake, biodistribution, and drug delivery. In addition to a discussion on the importance of the characterization of protein corona adsorbed on nanoparticle surfaces under conditions that mimic relevant physiological environment, we discuss the unresolved technical issues related to the characterization of nanoparticle-protein corona complexes during their journey in the body. Lastly, the paper offers a perspective on how the existing nanomaterial toxicity data obtained from studies should be reconsidered in the light of the presence of a protein corona, and how recent advances in fields, such as proteomics and machine learning can be integrated into the quantitative analysis of protein corona components.