We have studied in vitro toxicity of iron oxide nanoparticles (NPs) coated with a thin silica shell (Fe3O4/SiO2 NPs) on A549 and HeLa cells. We compared bare and surface passivated Fe3O4/SiO2 NPs to evaluate the effects of the coating on the particle stability and toxicity. NPs cytotoxicity was investigated by cell viability, membrane integrity, mitochondrial membrane potential (MMP), reactive oxygen species (ROS) assays, and their genotoxicity by comet assay. Our results show that NPs surface passivation reduces the oxidative stress and alteration of iron homeostasis and, consequently, the overall toxicity, despite bare and passivated NPs show similar cell internalization efficiency. We found that the higher toxicity of bare NPs is due to their stronger in-situ degradation, with larger intracellular release of iron ions, as compared to surface passivated NPs. Our results indicate that surface engineering of Fe3O4/SiO2 NPs plays a key role in improving particles stability in biological environments reducing both cytotoxic and genotoxic effects.