Owing to their unique physical, chemical, and mechanical properties, nanoparticles (NPs) have been used, or are being evaluated for use, in many fields (e.g., personal care and cosmetics, pharmaceutical, energy, electronics, food and textile). However, concerns regarding the environmental and biological implications of NPs are raised alongside the booming nanotechnology industry. Numerous studies on the biological effect of NPs have been done in the last decade, and many mechanisms have been proposed. In brief, mechanisms underlying the adverse biological effect caused by NPs can be summarized as: (i) indirect adverse effect induced by reactive oxygen species (ROS) generated by NPs, (ii) indirect adverse effect induced by released toxic ions, and (iii) adverse effect induced by direct interactions of NPs with biological systems. Up to now, most efforts have been focused on the first two mechanisms. In contrast, adverse biological effects induced by direct nano-bio interactions are the least researched. This is largely because of the complexity and lack of suitable techniques for characterizing the nano-bio interface. This dissertation aims at advancing our understanding of the nano-bio interactions leading to the adverse biological effect of NPs. Specifically, it is comprised of three parts. Firstly, because the aggregation of NPs alters particle size and other physicochemical properties of NPs, the property of NPs reaching and interacting with biological cells is very likely different from that of what we feed initially. Consequently, as the first step and an essential prerequisite for understanding the biological effect of NPs, NP aggregation is investigated and models are developed for predicting the stability and the extent of aggregation of NPs. Secondly, interactions between NPs and cell membrane are studied with paramecium as the model cell. Due to the lack of cell wall, the susceptible cell membrane of paramecium is directly exposed to NPs in the medium. The extent and strength of direct nano-cell membrane interaction is evaluated and quantified by calculating the interfacial force/interaction between NPs and cell membrane. A correlation is further established between the nano-cell membrane interaction and the lethal acute toxicity of NPs. We find NPs that have strong association or interaction with the cell membrane tend to induce strong lethal effects. Lastly, we demonstrate systematic experimental approaches based on atomic force microscope (AFM), which allows us to characterize nano-bio interfaces on the single NP and single-molecular level, coupled with modeling approaches to probe the nano-DNA interaction. Using quantum dots (QDs) as a model NP, we have examined, with the novel application of AFM, the NP-to-DNA binding characteristics including binding mechanism, binding kinetics, binding isotherm, and binding specificity. We have further assessed the binding affinity of NPs for DNA by calculating their interaction energy on the basis of the DLVO models. The modeling results of binding affinity are validated by the NP-to-DNA binding images acquired by AFM. The investigation of the relationship between the binding affinity of twelve NPs for DNA with their inhibition effects on DNA replication suggests that strong nano-DNA interactions result in strong adverse genetic effects of NPs. In summary, this dissertation has furthered our understanding of direct nano-bio interactions and their role in the biological effect of NPs. Furthermore, the models developed in this dissertation lay the basis for building an “ultimate” predictive model of biological effects of NPs that takes into account multiple mechanisms and their interactions, which would save a lot of testing costs and time in evaluating the risk of NPs.