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Nanotechnology is a multidisciplinary field implicated in high regard in medicine. The history of nanotechnology speaks about the potential uses of nanoparticles for decorative purposes and the treatment of different diseases. However, many potential innovations face hindrance at the laboratory level due to nanotoxicological issues. Therefore, it is important to understand the toxicity of nanomaterials and control it at the cellular level through the smart engineering of nanomaterials and accordingly manage pharmacological properties. Due to recent developments, nanomedicine has contributed immensely to disease -diagnostics, -prevention, -imaging, and -treatments. Therefore, in this chapter, we have tried to understand nanotoxicity by exploring the outcomes of various historical toxicity studies and existing laboratory techniques. We have also discussed some of the successful commercial nanomedicines available for various diseases and explored essential properties of nanomaterial beneficial for smart-multifunctionality of nanomedical applications. Further, to provide strict regulation over the rampant usage of nanomaterials, country-specific prominent regulatory bodies such as the Food and Drug Administration and the National Institute of Occupational Safety and Health Administration have laid out several guidelines and protocol documents, which are discussed. The chapter also contains specific regulatory problems faced in in vitro, in vivo, and in silico methods of nanomaterials usage. In the end, the chapter argues about the prospects of nanomedicine through the regulation of nanotoxicity.

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