Nanoparticles (NPs) exhibit unique physicochemical properties that render them valuable for applications in several fields, such as drug delivery and diagnostics. However, these properties can lead to adverse biological reactions, including cell toxicity. The mechanisms of NP-induced cytotoxicity involve complex pathways, including the generation of oxidative stress, reactive oxygen species (ROS), protein corona formation, and interactions with cell-uptake processes such as endocytosis and phagocytosis. This review discusses the in vivo and in vitro assays that help assess NP toxicity, covering cell viability, ROS generation, genotoxicity, and apoptosis. It highlights the importance of selecting appropriate methods to accurately evaluate the risks posed by NPs. The implications of these findings underscore the need for carefully formulating NP design to mitigate cytotoxic effects, ensuring safe and effective medical and industrial applications.