Nanomaterials, because of their tunable properties and performances, have been utilized extensively in everyday life related consumable products and technology. On exposure, beyond the physiological range, nanomaterials cause health risks via affecting the function of organisms, genomic systems, and even the 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 often produce false positives, and often cannot be implemented at a single cell level measurement for studying cell behavior without interference from its surrounding environment. Hence, there is a demand for a precise, accurate, sensitive assessment for toxicity using single cells. Recently, due to the advantages of automation of fluids and minimization of human errors, the integration of a cell-on-a-chip (CoC) with a microfluidic system is in practice for nanotoxicity assessments. This review explains nanotoxicity and its assessment approaches with advantages/limitations and new approaches to overcome the confines of traditional techniques. Recent advances in nanotoxicity assessment using a CoC integrated with a microfluidic system are also discussed in this review, which may be of use for nanotoxicity assessment and diagnostics.