TiO2-based photocatalysts were obtained during previous years in order to limit pollution and to ease human daily living conditions due to their special properties. However, obtaining biocompatible photocatalysts is still a key problem, and the mechanism of their toxicity recently received increased attention. Two types of TiO2 nanoparticles co-doped with 1% of iron and nitrogen (TiO2-1% Fe–N) atoms were synthesized in hydrothermal conditions at pH of 8.5 (HT1) and 5.5 (HT2), and their antimicrobial activity and cytotoxic effects exerted on human pulmonary and dermal fibroblasts were assessed. These particles exhibited significant microbicidal and anti-biofilm activity, suggesting their potential application for microbial decontamination of different environments. In addition, our results demonstrated the biocompatibility of TiO2-1% Fe–N nanoparticles at low doses on lung and dermal cells, which may initiate oxidative stress through dose accumulation. Although no significant changes were observed between the two tested photocatalysts, the biological response was cell type specific and time- and dose-dependent; the lung cells proved to be more sensitive to nanoparticle exposure. Taken together, these experimental data provide useful information for future photocatalytic applications in the industrial, food, pharmaceutical, and medical fields.