Titanium alloys are widely accepted as orthopedic or dental implant materials in the medical field. It is important to evaluate the biocompatibility of an implant material prior to use. A new β‐type ultrafine‐grained Ti–28Nb–2Zr–8Sn (TNZS) alloy with low Young's modulus of 31.6 GPa was fabricated. This study aims to evaluate the biocompatibility of TNZS alloy. In this study, we examined the microstructure, chemical composition and surface wettability of the TNZS alloy. The mouse embryonic osteoblast MC3T3‐E1 cells and human umbilical vein endothelial cells (HUVECs) were cultured to study the cytocompatibility of TNZS alloy. Also, we evaluated the proinflammatory response of TNZS alloy in vitro and in vivo. The results show that the TNZS did not cause cytotoxicity, genotoxicity to MC3T3‐E1 cells and HUVECs. Whereas, the TNZS alloy could significantly promote the cell proliferation, cell spreading and cell adhesion of MC3T3‐E1 cells and HUVECs, as well as facilitate the osteogenic differentiation of MC3T3‐E1 cells. Moreover, the TNZS alloy did not induce any remarkable proinflammatory response in vitro and in vivo. Thus, the novel TNZS alloy with an elasticity closer to that of human bone is biologically safe and could be a potential candidate for biomedical implant application. © 2019 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 107A: 1628–1639, 2019.