Nanomaterials, because of their tunable properties and performances, have been utilized extensively in everyday life related consumable products and technology. On exposure, beyond physiological range, nanomaterials cause health risks via affecting the function of organisms, genomic systems, and even central nervous system. Thus, new analytical approaches for nanotoxicity assessment to verify the feasibility of nanomaterials for future use are in demand. The conventional analytical techniques, such as spectrophotometric assay-based techniques usually require a lengthy and time-consuming process and many times produces false positives, and many times cannot be implemented at a single cell level measurement for studying cell behavior without interference of their surrounding environment. Hence, there is demand of a precise, accurate, sensitive assessment for toxicity using single cell. Recently, due to advantages of automation of fluids and minimization of human error, the integration of cell-on-a-chip (CoC) with microfluidic system is in practice for nanotoxicity assessments. This review explains nanotoxicity and assessment approaches with advantages/limitations and new approaches to overcome the confines of traditional techniques. Recent advances in nanotoxicity assessment using CoC integrated with microfluidic system are also discussed in this review, which may be of use for nanotoxicity assessment and diagnostics.