Nanotechnology is a major innovative scientific and economic growth area, which may present a variety of hazards for environmental and human health. The surface properties and very small size of nanoparticles and nanotubes provide surfaces that may bind and transport toxic chemical pollutants, as well as possibly being toxic in their own right by generating reactive radicals. There is a wealth of evidence for the harmful effects of nanoscale combustion-derived particulates (ultrafines), which when inhaled can cause a number of pulmonary pathologies in mammals and humans. However, release of manufactured nanoparticles into the aquatic environment is largely an unknown. This review addresses the possible hazards associated with nanomaterials and harmful effects that may result from exposure of aquatic animals to nanoparticles. Possible nanoparticle association with naturally occurring colloids and particles is considered together with how this could affect their bioavailability and uptake into cells and organisms. Uptake by endocytotic routes are identified as probable major mechanisms of entry into cells; potentially leading to various types of toxic cell injury. The higher level consequences for damage to animal health, ecological risk and possible food chain risks for humans are also considered based on known behaviours and toxicities for inhaled and ingested nanoparticles in the terrestrial environment. It is concluded that a precautionary approach is required with individual evaluation of new nanomaterials for risk to the health of the environment. Although current toxicity testing protocols should be generally applicable to identify harmful effects associated with nanoparticles, research into new methods is required to address the special properties of nanomaterials.