Improvement in nanosafety is one of the major tasks for innovation force of nanotechology, which may be accomplished by design and development of biocompatible nanomaterials. Biocompatibility assessment demands investigation of nano-bio interactions that affect behavior and fate of nanoparticles in biological systems. Metallic nanoparticles (NPs) are particularly prone to interact with endogenous biothiols like cysteine and glutathione. This study was designed to evaluate intimate interactions between cysteine and glutathione with biomedically relevant metallic NPs, i.e. silver (AgNPs) and gold (AuNPs). Systematic and comprehensive analysis revealed that preparation of AgNPs and AuNPs in the presence of biothiols lead to stable NPs stabilized with oxidized forms of biothiols. Their biocompatibility was tested by evaluation of cell viability, ROS production, apoptosis induction and DNA damage in murine fibroblast cells (L929), while ecotoxicity was tested using aquatic model organism Daphnia magna. The toxicity of these NPs was considerably lower compared to the ionic metal forms. Comparison with data published on polymer-coated NPs evidenced that surface modification with biothiols made them safer for the environment, but more toxic for use in humans. These results represent significant contribution to the collection of knowledge on the role of biothiols on the fate and behavior of metal-based nanomaterials.