Wide application of nanoparticles (NPs) in consumer products over the last decade has increased their flux in the environment. This paper provides comprehensive review on the biocatalytic production pathways, transformations, and toxicity to human and other organisms of important NPs. Plants, algae, fungi, and bacteria have been used for energy-efficient and nontoxic biocatalytic production of NPs. The process is simple, serving as an alternative to the more popular physicochemical methods. NPs go through significant physicochemical transformation in the environment. Ionic strength, pH, and NPs' surface potential strongly influence their stability and aggregation. Their transformations are linked to their bioavailability and aging including surface coatings and dissolved organic carbon effects. In addition, nanotoxicity has been a major global concern as NPs are toxic to organisms due to their cytotoxicity and genotoxicity. The stability and transformation of NPs in environment influence their short-and long-term toxicity. Release of free metal ions, dissolution-enhanced toxicity, and direct intercalation with biological targets are studied the most. Their toxicity to ecological receptors and organisms are linked to oxidative stress by generation of reactive oxygen species. Moreover, NPs toxicity depends on their physicochemical alterations. Inherent and acquired properties have potential to alter toxicity of NPs. Thus achieving safe nanotechnology and minimizing their adverse impact is important to protect the health of humans as well as the environment.