Nanoparticles from natural and anthropogenic sources are abundant in the environment, thus human exposure to nanoparticles is inevitable. Due to this constant exposure, it is critically important to understand the potential acute and chronic adverse effects that nanoparticles may cause to humans. In this review, we explore and highlight the current state of nanotoxicology research with a focus on mechanistic understanding of nanoparticle toxicity at organ, tissue, cell, and biomolecular levels. We discuss nanotoxicity mechanisms, including generation of reactive oxygen species, nanoparticle disintegration, modulation of cell signaling pathways, protein corona formation, and poly(ethylene glycol)-mediated immunogenicity. We conclude with a perspective on potential approaches to advance current understanding of nanoparticle toxicity. Such improved understanding may lead to mitigation strategies that could enable safe application of nanoparticles in humans. Advances in nanotoxicity research will ultimately inform efforts to establish standardized regulatory frameworks with the goal of fully exploiting the potential of nanotechnology while minimizing harm to humans.