Graphene, graphene oxide, and reduced graphene oxide have been widely considered as promising candidates for industrial and biomedical applications due to their exceptionally high mechanical stiffness and strength, excellent electrical conductivity, high optical transparency, and good biocompatibility. In this article, we reviewed several techniques that are available for the synthesis of graphene-based nanomaterials, and discussed the biocompatibility and toxicity of such nanomaterials upon exposure to mammalian cells under in vitro and in vivo conditions. Various synthesis strategies have been developed for their fabrication, generating graphene nanomaterials with different chemical and physical properties. As such, their interactions with cells and organs are altered accordingly. Conflicting results relating biocompatibility and cytotoxicity induced by graphene nanomaterials have been reported in the literature. In particular, graphene nanomaterials that are used for in vitro cell culture and in vivo animal models may contain toxic chemical residuals, thereby interfering graphene-cell interactions and complicating interpretation of experimental results. Synthesized techniques, such as liquid phase exfoliation and wet chemical oxidation, often required toxic organic solvents, surfactants, strong acids, and oxidants for exfoliating graphite flakes. Those organic molecules and inorganic impurities that are retained in final graphene products can interact with biological cells and tissues, inducing toxicity or causing cell death eventually. The residual contaminants can cause a higher risk of graphene-induced toxicity in biological cells. This adverse effect may be partly responsible for the discrepancies between various studies in the literature.