With the increasing interest in the biological applications of carbon nanotubes, their interactions in the biological interphase and their general cytotoxicity have become major issues. In spite of their salient properties, major hurdles still exist for their use in biological applications, due to their main characteristics, including their hydrophobic surfaces and tendency to aggregate, as well as their unknown interactions in the cellular interphase. In this Research News, these characteristics of carbon nanotubes, a model nanomaterial, are investigated. Thus, the cytotoxicity of carbon nanotubes, the influence of functionalization, as well as their interactions with different mammalian cell lines are studied. Moreover, suggestions for the improvement of their biocompatibility and the design of biocompatible carbon nanotube-based systems are provided.